Unjust enrichment bars sugar rebate claims treated as refunds when duty incidence is passed on to customers.

Rebate claims arising from excess sugar production under Notification No. 132/82-C.E. were treated as refund-like amounts governed by Section 11B of the Central Excise Act, 1944. The statutory refund scheme required denial where the duty incidence had been passed on, save for specified exceptions under Section 11B(2) and the overriding effect of Section 11B(3). As the claim did not fall within any exception and the duty burden had in fact been passed to customers, the doctrine of unjust enrichment applied and the rebate was held not maintainable.

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Issues: Whether the rebate claim arising from excess production of sugar under Notification No. 132/82-C.E. was barred by the doctrine of unjust enrichment in the light of Section 11B of the Central Excise Act, 1944.

Analysis: The rebate was structured as a refund-like credit in the PLA and, after 20-9-1991, refunds became governed by Section 11B(2) and the overriding mandate of Section 11B(3) of the Central Excise Act, 1944. The statutory scheme required refund to be denied where the incidence of duty had been passed on, except in the specified statutory exceptions. The claim under Notification No. 132/82-C.E. did not fall within those exceptions, and it was undisputed that the duty incidence had been passed on to customers. The bar of unjust enrichment therefore applied.

Conclusion: The rebate claim was hit by unjust enrichment and was not maintainable.

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