Unjust enrichment and excise refund: duty paid after excess clearance was refundable when incidence was not passed on.

Refund of duty paid after excess clearance was held not to be barred by unjust enrichment where the duty was deposited after the department detected the excess clearances and the assessee later succeeded in challenging the appropriation. On those facts, the refund was treated as arising from duty paid during the dispute, and the assessee showed that the duty burden had not been passed on to buyers. The statutory presumption under Section 12B was therefore not enough to defeat the claim, and the department failed to establish unjust enrichment. The refund was not regarded as erroneous, and the revenue's challenge was rejected.

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Issues: Whether the refund of duty paid after excess clearance was hit by unjust enrichment and recoverable as an erroneous refund under the Central Excise Act.

Analysis: The duty was deposited after the department pointed out the excess clearances, and the subsequent appellate order set aside the appropriation with consequential relief. On those facts, the refund arose from duty paid during the pendency of the dispute and the assessee established that the incidence of duty had not been passed on to buyers. The presumption under Section 12B was therefore held not to defeat the refund, and the department failed to prove unjust enrichment.

Conclusion: The refund was not erroneous and the bar of unjust enrichment did not apply; the revenue appeal was rejected.

Ratio Decidendi: Where duty is paid after detection of excess clearance and is refunded pursuant to a successful challenge, the presumption of unjust enrichment does not apply unless the department establishes that the duty incidence was passed on.

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