Refund of excess excise duty was allowed subject to proof that the consignee had not taken Cenvat credit.

Excess central excise duty paid because of an SAP system error was treated as refundable, subject to verification that the consignee had not availed Cenvat credit on the excess amount. Where the recipient has not taken such credit, the duty burden is not shown to have been passed on, so the doctrine of unjust enrichment does not bar the claim. Verification of the consignee's records was therefore consistent with law, and refund remained admissible if non-availment of credit was established.

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Issues: Whether refund of excess central excise duty paid due to a system error was admissible subject to verification that the consignee had not availed Cenvat credit, and whether the doctrine of unjust enrichment barred the claim.

Analysis: The applicable rate of duty for the goods under Chapter 72 of the Central Excise Tariff Act, 1985 was 12.36% ad valorem, but the invoices reflected and the respondent paid duty at 24.729% because of an SAP system error. The refund claim was founded on excess payment of duty, and its verification depended on the consignee's Cenvat records. Where the recipient has not taken credit of the excess duty, the duty burden is not shown to have been passed on, and the bar of unjust enrichment does not arise. The direction for verification of the consignee's records was therefore consistent with law.

Conclusion: The refund claim was held admissible subject to verification of non-availment of Cenvat credit at the consignee's end, and the plea of unjust enrichment would not apply if such credit was not taken.

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