Unjust enrichment in excise refund: evidence showed the duty burden stayed with the assessee, so refund was not barred.

Refund of excise duty paid on levy sugar was examined on the basis of unjust enrichment. The decisive question was whether the differential duty burden had been passed on to the Food Corporation of India or any other buyer. On the evidence, including the FCI letter and the payment chain showing that the sugar under the release order was lifted and paid for through FCI, the excess duty was found to have been borne by the assessee. The absence of contrary evidence from the Revenue, and the fact that invoice correlation difficulties alone did not establish passing on of duty, meant the refund was not barred by unjust enrichment and the rejection of the claim was unsustainable.

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Issues: Whether the refund claim of excise duty paid on levy sugar was barred by unjust enrichment.

Analysis: The refund dispute turned on whether the incidence of the differential duty had been passed on to the Food Corporation of India or any other buyer. The evidence on record, particularly the FCI letter certifying that excise duty was paid only at the levy rate for the relevant quantity and that the sugar covered by the release order had been lifted and paid for through FCI, supported the finding that the excess duty burden was borne by the assessee. The Revenue did not produce contrary evidence showing reimbursement of the differential duty. Mere difficulty in correlating invoice particulars with payments was held insufficient to establish passing on of duty when the overall transaction chain showed payment through FCI against the release order.

Conclusion: The refund was not hit by unjust enrichment and the rejection by the adjudicating authority was unsustainable. The Revenue's appeal failed and the assessee succeeded.

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