Refund limitation and unjust enrichment: investigation deposits are not duty, and time runs from final rejection of the demand.

For a refund claim arising from an amount deposited during investigation, limitation under Section 11B runs from the date the demand is finally held unsustainable, not from the earlier date of deposit. On that basis, the refund claim was within time. The doctrine of unjust enrichment does not apply where the amount deposited is not duty, and a pre-adjudication investigation deposit is treated as such a non-duty payment. The refund was therefore admissible and the Revenue's challenge failed.

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Issues: (i) whether the refund claim was barred by limitation under Section 11B of the Central Excise Act, 1944; (ii) whether the bar of unjust enrichment applied to the amount paid during investigation.

Issue (i): whether the refund claim was barred by limitation under Section 11B of the Central Excise Act, 1944.

Analysis: The relevant date for claiming refund was the date on which the appellate authority finally held the demand unsustainable. Since the refund claim was filed after the demand was set aside, the period of limitation had to be computed from that date and not from the earlier date of deposit during investigation.

Conclusion: The refund claim was not barred by limitation.

Issue (ii): whether the bar of unjust enrichment applied to the amount paid during investigation.

Analysis: The amount deposited during investigation was not duty. Where the amount itself is not duty, the doctrine of unjust enrichment does not apply.

Conclusion: The bar of unjust enrichment was not applicable.

Final Conclusion: The refund was held to be admissible and the Revenue's challenge failed.

Ratio Decidendi: For a refund claim arising from a deposit made during investigation, limitation runs from the date on which the demand is finally held unsustainable, and the doctrine of unjust enrichment does not apply where the amount deposited is not duty.

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