Unjust enrichment and excise refund: credit notes on price finalisation did not bar repayment where duty burden was not passed on.

Refund of excess central excise duty was held admissible where provisional pricing was later finalised at a lower rate and the buyer's account was adjusted through credit notes. The Tribunal accepted that the credit notes were used to work out and settle the excess amount in accounts, rather than to provide a post-sale price reduction contemplated by the Board circular. It also relied on the buyer's certificate and the absence of any Cenvat credit taken on the duty element to conclude that the duty burden had not been passed on. On those facts, the doctrine of unjust enrichment did not bar the refund.

---

---

Issues: Whether the doctrine of unjust enrichment barred refund of excess central excise duty when the buyer's account was adjusted through credit notes issued on finalisation of price.

Analysis: The refund claim arose from finalisation of provisional pricing at a lower rate, after duty had been paid on the higher provisional price. The evidence accepted by the appellate authority showed that the so-called credit notes were used to compute the excess amount and to adjust it against future payments in settlement of accounts, and not as a post-sale price reduction of the kind contemplated in the Board circular. The buyer's certificate and the absence of any Cenvat credit taken on the duty element supported the finding that the excess duty burden had not been passed on. The Tribunal also noted that similar relief had been granted in earlier decisions on comparable facts and that no contrary authority was shown.

Conclusion: The bar of unjust enrichment was not attracted and the refund was admissible.

---