Unjust enrichment and excise refund: discounts passed through cheques and debit notes defeated the Revenue's objection.

Refund of Central Excise duty was held not to be barred by unjust enrichment where the assessee's sales policy provided performance-based discounts, including cash, turnover and special discounts, granted through cheques or debit notes. The duty had been paid on the factory gate price excluding the discount component, and Range Officer verification reports supported that the discount amounts were passed on to buyers while the incidence of duty was not. The claims were also within limitation, and the Revenue had not disturbed earlier findings on passing on of discounts. The refund was therefore allowed.

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Issues: Whether refund of Central Excise duty was barred by the doctrine of unjust enrichment when the assessee had granted discounts to buyers through cheques or debit notes and had claimed that the duty incidence was not passed on.

Analysis: The records showed that the assessee had allowed performance-based discounts, including cash discount, turnover discount, and special discount, in terms of its sales policy. The duty for which refund was claimed had been paid on the factory gate price, excluding the discount component, and the refund claims were supported by verification reports of the Range Officers certifying that the discount amounts had been passed on to buyers and that the incidence of duty had not been passed on. The Tribunal also noted that the refund claims were filed within limitation and that the earlier appellate findings on the passing on of discounts had not been disturbed by the Revenue.

Conclusion: The refund was not hit by unjust enrichment and the assessee was entitled to the refund.

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