Refund of excise duty cannot be denied on an unproved unjust enrichment plea; delayed refund may attract compensatory interest.

Excise duty collected under protest on goods later found classifiable under Item 26AA(ia) was held refundable because the levy lacked authority of law once the assessee's entitlement had been upheld. A belated plea that the duty burden had been passed on to buyers could not defeat refund where it was neither pleaded in the written statement nor supported by facts, so unjust enrichment was not accepted on that record. Because refund was withheld for an extended period despite repeated requests and the Tribunal's order, compensatory interest was held payable at 12% per annum if payment was not made within the time granted.

---

---

Issues: (i) Whether the petitioner was entitled to refund of excise duty collected on bars classified under Item 26AA(ia); (ii) Whether the refund could be denied on the ground that the duty burden was passed on to buyers and, if refund was delayed, whether interest was payable.

Issue (i): Whether the petitioner was entitled to refund of excise duty collected on bars classified under Item 26AA(ia)

Analysis: The duty had been paid under protest, the petitioner had pursued the statutory remedies, and the Tribunal had already upheld the claim that the goods were classifiable as bars under Item 26AA(ia). The departmental recovery was therefore without authority of law, and the refusal to refund despite the Tribunal's order was unjustified.

Conclusion: The petitioner was entitled to refund of the excise duty collected on the relevant products.

Issue (ii): Whether the refund could be denied on the ground that the duty burden was passed on to buyers and, if refund was delayed, whether interest was payable.

Analysis: The plea of passing on the burden was neither pleaded in the written statement nor supported by any factual foundation. A disputed factual contention of unjust enrichment could not be permitted at that stage. Since the refund was withheld for an extended period despite repeated requests and the Tribunal's order, interest was warranted on the delayed payment.

Conclusion: The refund could not be denied on the ground of passing on the burden, and interest at 12% per annum was payable if refund was not made within the time granted.

Final Conclusion: The writ petition succeeded, the excise duty had to be refunded, and delayed payment would attract interest, with costs awarded to the petitioner.

Ratio Decidendi: Duty collected without authority of law must be refunded when the assessee's entitlement has been upheld, and a belated unjust enrichment plea cannot defeat refund unless it is properly pleaded and supported by facts; compensatory interest may follow delayed refund.

---