Unjust enrichment does not bar excise refund when credit notes reverse the duty burden and pass the benefit back to buyers.

Refund of excise duty is not barred by unjust enrichment where the assessee initially collected duty from buyers but later issued credit notes reversing the duty element and restoring the benefit to customers. The Tribunal applied the principle that unjust enrichment does not survive once the duty burden is shown to have been neutralised and not retained by the assessee. On that factual basis, the refund claim was held maintainable because the incidence of duty had been effectively passed back to the buyers and was no longer borne by them.

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Issues: Whether the refund claim was barred by unjust enrichment despite the appellant having issued credit notes to the buyers for the excise duty earlier recovered through invoices.

Analysis: The appellant had initially charged and recovered excise duty but later issued credit notes to the same buyers, thereby reversing the duty element that had been passed on. The Tribunal relied on the principle that where the duty incidence is subsequently neutralised by credit notes and the benefit is passed back to the customers, the bar of unjust enrichment does not survive. The cited High Court decisions were applied to hold that refund cannot be denied when the assessee establishes that the duty burden was not ultimately retained or passed on.

Conclusion: The appellant succeeded in showing that the duty incidence had been withdrawn from the buyers, and the refund claim was not hit by unjust enrichment.

Ratio Decidendi: Where excise duty recovered from buyers is subsequently reversed by issuing credit notes and the incidence is effectively restored to the buyers, the doctrine of unjust enrichment does not bar refund.

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