Refund of excess excise duty after rate reduction is admissible, and unjust enrichment does not bar relief where excess is reversed.

Refund of excise duty paid at a higher rate became admissible after the operative notification reduced the applicable rate from 18% to 15%, because the excess collected for the relevant period was not duty lawfully due. The article states that the refund did not arise from any valuation or quantity dispute, but from payment at the earlier rate after the reduction had taken effect. It further notes that the doctrine of unjust enrichment did not bar refund where the excess had been passed back through credit notes and the corresponding recovery from dealers had been reversed.

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Issues: Whether the respondent was entitled to refund of excise duty paid in excess of the reduced rate of duty after the issue of the notification reducing the rate from 18% to 15%, and whether the doctrine of unjust enrichment barred the refund.

Analysis: The refund arose not from a dispute on valuation or quantity, but from payment of duty at the earlier higher rate after the operative notification had reduced the applicable rate. Once the rate stood reduced, duty was payable only at 15%, and the excess collected at 18% for the relevant period was not duty lawfully due to the Government. The decision relied on the principle that refund becomes admissible where excess payment results from a subsequent reduction in the rate of duty, and that unjust enrichment does not apply in such circumstances when the excess has been returned through credit notes and corresponding recovery from dealers has been reversed.

Conclusion: The respondent was entitled to the refund, and the bar of unjust enrichment did not apply.

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