Exemption-based refund claims are subject to unjust enrichment unless the claimant proves duty incidence was not passed on.

A refund or rebate claim under an exemption notification for excess sugar production, if pending after the amended Section 11B came into force, is governed by the doctrine of unjust enrichment. The provision's non-obstante effect requires the claimant to show that the duty burden was not passed on, unless the claim falls within a statutory exception. As the notification-based claim was not within the excluded categories, the assessee had to satisfy Section 11B before refund could be granted. The exemption character of the claim did not take it outside the statutory bar, so the refund could not be allowed without proof of non-passing of incidence.

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Issues: Whether the rebate or refund claimed under Notification No. 132/82-C.E. for excess sugar production was barred by the doctrine of unjust enrichment under Section 11B of the Central Excise Act, 1944.

Analysis: Notification No. 132/82-C.E., issued under Rule 8(1) of the Central Excise Rules, 1944, granted exemption in respect of excess production of sugar during the specified lean-season period. The refund claim remained pending beyond 20-9-1991, and therefore had to be tested under Section 11B as amended. Section 11B contains a non-obstante clause and requires refund, except in the stated exceptions, to be dealt with in accordance with the doctrine of unjust enrichment. The claim under the notification was not one of the excluded categories, and the assessee was required to establish that the duty incidence had not been passed on. The principle was treated as applicable to rebate/refund arising from such exemption notifications, consistent with the binding Supreme Court view relied upon.

Conclusion: The rebate/refund was held to be subject to unjust enrichment and the claim could not be allowed without satisfying the requirements of Section 11B.

Final Conclusion: The exemption-based refund was not outside the statutory bar of unjust enrichment, and the Revenue's challenge succeeded.

Ratio Decidendi: A refund or rebate claim pending after the coming into force of the amended Section 11B of the Central Excise Act, 1944 is governed by the doctrine of unjust enrichment unless it falls within a statutory exception.

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