Unjust enrichment bars refund where duty was passed on to buyers and later credit-note adjustments do not rebut the presumption.

A refund claim was held to be barred by unjust enrichment where duty had been collected from buyers and the invoices reflected duty payment. Subsequent issuance of credit notes or debit notes, and later reversal of Cenvat credit by the buyers, did not by themselves prove that the duty burden had not been passed on. The statutory presumption of unjust enrichment was therefore not displaced by later accounting entries, and the refund was rejected.

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Issues: Whether the refund claim was barred by unjust enrichment where duty had initially been collected from the buyers and credit notes or debit notes were issued only subsequently.

Analysis: The appellant had cleared the goods on payment of duty and the buyers had availed Cenvat credit on the duty shown in the invoices. The subsequent reversal of credit and issuance of debit notes did not, by itself, establish that the burden of duty had not been passed on. In such circumstances, the burden to displace the statutory bar of unjust enrichment was not discharged merely because the buyers later made accounting entries in favour of the appellant.

Conclusion: The refund claim remained hit by the bar of unjust enrichment and was rightly rejected.

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