Unjust enrichment presumption rebutted where price records showed duty was not passed on, sustaining the refund claim.

Section 12B of the Central Excise Act, 1944, which raises a presumption that excise duty has been passed on to the buyer, did not apply to a refund claim filed before its insertion on 20 November 1991. The assessee also rebutted the presumption of unjust enrichment by producing reliable price statements showing that the final product prices remained unchanged after payment of the disputed duty, indicating that the duty element was not built into the sale price. The appellate authority had ignored this evidence, while the Tribunal accepted it. The refund was therefore upheld and the Department's challenge failed.

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Issues: Whether the assessee had rebutted the presumption of passing on the incidence of duty so as to sustain the refund claim and whether Section 12B of the Central Excise Act, 1944 applied to the refund application made before its substitution.

Analysis: Section 12B of the Central Excise Act, 1944, which creates a presumption that the incidence of excise duty has been passed on to the buyer unless the contrary is proved, was inserted only with effect from 20 November 1991 and therefore did not govern the refund claim filed in May 1987. Independently of that provision, the record showed that the assessee had produced price statements for the relevant periods demonstrating that the prices of the final products remained unchanged even after the disputed duty was paid. Those materials were accepted as reliable and sufficient to show that the duty element had not been included in the price of the finished goods. The appellate authority had ignored this evidence, while the Tribunal had properly appreciated it.

Conclusion: The presumption of unjust enrichment was rebutted and the refund was rightly allowed; the Department's challenge failed.

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