Unjust enrichment and excise refund: documentary evidence showed duty incidence was not passed on, so refund was allowed.

Refund under the Central Excise Act was held not to be barred by unjust enrichment where duty had been paid under protest and the classification dispute had already been settled in favour of the assessee. The Tribunal accepted contemporaneous documentary evidence, including prior declarations, invoices, a Chartered Accountant certificate and balance-sheet entries showing the duty as receivable, as proof that the duty incidence was not passed on. It found that the lower authority rejected this evidence without cogent reasons and failed to conduct a proper evidentiary analysis. The refund rejection was therefore set aside, and the assessee was held entitled to refund with applicable interest.

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Issues: Whether the refund claim was barred by unjust enrichment under Section 11B of the Central Excise Act, 1944.

Analysis: The refund arose from duty paid under protest on goods whose classification dispute had already been finally settled in favour of the assessee. The assessee produced prior written declaration, invoice copies, a Chartered Accountant certificate, and balance-sheet entries showing the duty amount as receivable, to establish that the incidence of duty had not been passed on to customers. The Tribunal held that the Commissioner (Appeals) rejected this material without disclosing any cogent reason for disbelieving it, and that evidence must be weighed rather than counted. The order below was found to be arbitrary and unsupported by proper evidentiary analysis. The Tribunal accepted the documentary evidence and held that the test of unjust enrichment was satisfied in the assessee's favour.

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

Final Conclusion: The refund rejection was set aside and the assessee was held entitled to refund with applicable interest.

Ratio Decidendi: A refund claim cannot be denied on unjust enrichment when credible contemporaneous documentary evidence shows that the duty incidence was borne by the claimant and the rejection of such evidence is not supported by a reasoned finding.

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