Refund claim not barred by unjust enrichment or limitation where duty was paid under protest and burden was not passed on.

Refund under Section 11B of the Central Excise and Salt Act was not barred by unjust enrichment because the evidence showed that the incidence of duty had not been passed on to customers, and the Department did not dispute that factual position on merits. The Court also held that duty for the disputed period was paid under protest: contemporaneous correspondence and the exemption record showed repeated objections to withdrawal of exemption and the hardship caused, so strict compliance with Rule 233B was not required where protest was otherwise apparent. The six-month limitation under Section 11B therefore did not apply, and the refund claim was allowed.

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Issues: (i) Whether the refund claim was barred by unjust enrichment under Section 11B of the Central Excise and Salt Act, 1944. (ii) Whether the duty paid for the disputed period was paid under protest so as to attract the second proviso to Section 11B(1) and exclude limitation.

Issue (i): Whether the refund claim was barred by unjust enrichment under Section 11B of the Central Excise and Salt Act, 1944.

Analysis: The materials before the authorities showed that the incidence of duty had not been passed on to customers. The assessee had furnished cost details and consistently maintained that the burden remained with it. The departmental authorities did not dispute this position on merits and the challenge before the appellate court was confined to limitation and protest.

Conclusion: The claim was not defeated by unjust enrichment and this objection failed against the assessee.

Issue (ii): Whether the duty paid for the disputed period was paid under protest so as to attract the second proviso to Section 11B(1) and exclude limitation.

Analysis: The correspondence and the ad hoc exemption order recorded repeated representations against withdrawal of exemption, the hardship caused by duty on the full quantity, and the fact that the returned quantity had already suffered duty when cleared by the downstream purchaser. The Court treated these contemporaneous records as showing a real protest in substance. It further held that strict non-observance of Rule 233B could not override the statutory proviso where the protest was otherwise evident from the record.

Conclusion: The duty was paid under protest and the six-month limitation under Section 11B did not apply.

Final Conclusion: The refund claim for March 1994 could not be rejected on limitation or unjust enrichment grounds, and the assessee was entitled to the refund sought.

Ratio Decidendi: Where duty is paid under protest, the limitation bar under Section 11B does not apply, and protest may be established by the substance of contemporaneous correspondence and surrounding records without rigid insistence on Rule 233B formalities.

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