Unjust enrichment does not bar refund where duty paid under investigation was not passed on to buyers.

Refund of duty paid during investigation was not hit by unjust enrichment where the assessee was clearing goods under an SSI exemption and had not recovered excise duty from buyers. On those facts, the incidence of duty was not passed on, so the doctrine of unjust enrichment did not apply. The absence of a show-cause notice for appropriation further supported the refund claim, and rejection of refund on that ground was unsustainable.

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Issues: Whether refund of the amount paid during investigation was barred by unjust enrichment when the assessee claimed SSI exemption and had not collected excise duty from customers.

Analysis: The amount was paid during investigation, but the assessee was clearing goods without payment of duty under the SSI exemption notification and was not recovering excise duty from buyers. In such circumstances, the incidence of duty had not been passed on, and the doctrine of unjust enrichment had no application. The absence of a show-cause notice for appropriation of the amount further supported the assessee's claim.

Conclusion: The rejection of refund on the ground of unjust enrichment was unsustainable, and the refund claim was allowed.

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