Unjust enrichment in excise refunds turns on proof that duty burden was passed on; post-clearance payment can rebut the presumption.

Refund claims arising from finalisation of provisional assessment are not automatically outside the unjust enrichment bar; their allowability depends on the applicable refund framework and the facts showing whether the duty burden was passed on. Where duty is deposited after clearance of goods during a dispute, and the record contains no categorical finding or evidence that the incidence was transferred to buyers, the presumption of unjust enrichment is rebutted. In such circumstances, refund cannot be denied merely on a suggestion that the duty may have formed part of cost. The governing principle is that unjust enrichment must be established on evidence, not presumed without proof.

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Issues: (i) Whether refund arising on finalisation of provisional assessment was exempt from the bar of unjust enrichment under Rule 9B(5) of the Central Excise Rules, 1944 and Section 11B of the Central Excise Act, 1944. (ii) Whether the refund claim was hit by unjust enrichment when the duty had been paid after clearance of the goods and the Revenue adduced no evidence that the incidence had been passed on.

Issue (i): Whether refund arising on finalisation of provisional assessment was exempt from the bar of unjust enrichment under Rule 9B(5) of the Central Excise Rules, 1944 and Section 11B of the Central Excise Act, 1944.

Analysis: The Tribunal noted that the law on refund claims consequent upon finalisation of provisional assessment had to be read in the light of the amended Rule 9B(5) and the governing Supreme Court decisions. It accepted that the amended regime applied to refund claims filed after the relevant amendment, but held that the broader question still depended on whether the refund actually arose on finalisation of provisional assessment or in consequence of later proceedings. On the record, the refund claim was linked to assessments finalised after a long dispute, but the Tribunal considered the decisive point to be the nature of the payment and the absence of proof that the duty burden had been passed on.

Conclusion: The claim was not rejected on the ground that refund from finalisation of provisional assessment was per se outside Section 11B; the decisive factor was whether unjust enrichment was established on facts.

Issue (ii): Whether the refund claim was hit by unjust enrichment when the duty had been paid after clearance of the goods and the Revenue adduced no evidence that the incidence had been passed on.

Analysis: The Tribunal found that the amount had been deposited after clearance of the goods during the pendency of the dispute and that the adjudicating authority had not recorded a categorical finding showing that the incidence of duty had been passed on to buyers. It held that the Revenue's suggestion that the amount could still have been absorbed as cost was unsupported by evidence. Relying on the factual findings recorded below and the cited precedent on post-clearance payments, the Tribunal concluded that the presumption under Section 12B stood rebutted on the facts of the case.

Conclusion: The refund was not hit by the bar of unjust enrichment.

Final Conclusion: The Revenue's appeal failed and the refund order was sustained.

Ratio Decidendi: Where duty is paid after clearance of the goods and the record does not show that the incidence was passed on, the presumption of unjust enrichment is rebutted and refund cannot be denied on that ground.

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