Unjust enrichment and excise refund on trade discounts: documentary evidence beyond credit notes can rebut pass-on of duty.

Refund of excess excise duty on post-clearance trade discounts credited through credit notes was considered not to be barred by unjust enrichment where the discount was an admissible deduction and was supported by a chartered accountant's certificate and dealer certificates. The evidence showed that the incidence of duty on the discounted amount had not been passed on, the dealers were not registered for central excise purposes, and no Cenvat credit issue arose. On those facts, the credit notes were not treated as the sole basis for denying refund, and authorities rejecting refund on credit notes alone were held inapplicable.

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Issues: Whether refund of excess excise duty on post-clearance trade discounts passed through credit notes was barred by unjust enrichment.

Analysis: The discount was not in dispute as an admissible deduction and was processed through credit notes after clearance. The assessee produced a chartered accountant's certificate and dealer certificates to show that the incidence of duty on the discount had not been passed on, that the dealers were not registered for central excise purposes, and that no Cenvat credit issue arose. On these facts, the evidence went beyond credit notes alone and rebutted the allegation of unjust enrichment. The reliance placed on authorities denying refund on the basis of credit notes alone was held inapplicable on the facts.

Conclusion: The refund was not hit by unjust enrichment and was allowable in favour of the assessee.

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