Unjust enrichment in refund claims fails when duty is shown as receivable and not passed on to buyers.

The CESTAT held that refund was not barred by unjust enrichment where the assessee consistently reflected the duty amount as a receivable from the Revenue in its balance sheet and books of account. That accounting treatment showed the incidence of duty had not been passed on to buyers, and the amount was not part of the cost of the final product. The refund therefore could not be credited to the Consumer Welfare Fund, the appellate order was unsustainable, and consequential relief followed.

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Issues: Whether the refund claim was barred by unjust enrichment and was therefore correctly credited to the Consumer Welfare Fund.

Analysis: The appellant had shown the refund amount as receivable in the balance sheet with a clear narration that it was due from the Revenue authorities. On that basis, the amount was not treated as part of the cost of the final product and there was no indication that the burden had been passed on to customers. The credit entry in the books supported the conclusion that the incidence of duty had not been recovered from buyers.

Conclusion: The bar of unjust enrichment was not attracted and the refund could not be credited to the Consumer Welfare Fund.

Final Conclusion: The appellate order was unsustainable and the refund claim succeeded with consequential relief.

Ratio Decidendi: Where the refundable duty amount is consistently reflected as a receivable from the Revenue in the books and balance sheet, the assessee establishes that the duty incidence was not passed on and the refund is not hit by unjust enrichment.

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