Unjust enrichment bars excise refund where a manufacturer paid full duty despite an available exemption and passed on the burden.

A manufacturer that did not avail an available exemption under Notification No. 1/93-CE at the time of clearance and instead paid full excise duty could not later seek refund of part of that duty. Because the goods had already moved through distributors, wholesalers, retailers and customers, the duty burden had been passed on and the ultimate buyers could not be identified for reimbursement. Any refund in those circumstances would unjustly enrich the manufacturer. The refund claim was therefore barred by the doctrine of unjust enrichment and was rejected.

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Issues: Whether a manufacturer who did not claim exemption under Notification No. 1/93-CE at the time of clearance and paid excise duty in full could later claim refund of a portion of the duty on the basis of that notification.

Analysis: The exemption under the notification was an available option at the relevant time, but the manufacturer chose not to avail it and instead cleared the goods on payment of full duty. After clearance, the goods had moved through the trade chain to distributors, wholesalers, retailers and customers, making it impossible to identify and reimburse the ultimate buyers. On these facts, the duty burden had already been passed on, and any refund would result in the manufacturer retaining a benefit not borne by it. The refund claim was therefore hit by the doctrine of unjust enrichment.

Conclusion: The manufacturer was not entitled to refund. The question was answered against the manufacturer and in favour of the Revenue.

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