Unjust enrichment in excise refund claims depends on proof of duty incidence being passed on, not mere accounting entries.

Section 11B of the Central Excise Act, 1944 requires proof that the incidence of duty was not passed on to another person before refund can be denied on unjust enrichment. Mere reflection of the amount in the books as expenditure, or later as a refund receivable, is not by itself enough to show that the duty burden was shifted. The finding must rest on evidence of actual passing on of duty, not on accounting treatment alone. On that basis, the refund was held not to be barred by unjust enrichment, and the assessee was entitled to refund with applicable interest.

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Issues: Whether the refund claim was barred by unjust enrichment merely because the amount was reflected in the accounts as expenditure and not as a receivable.

Analysis: The statutory scheme under Section 11B of the Central Excise Act, 1944 requires the authority to satisfy itself that the incidence of duty has not been passed on to another person. Mere treatment of the amount in the books of account, including its reflection as expenditure or its later reversal as refund receivable, does not by itself establish that the duty burden was shifted. The finding of unjust enrichment must rest on evidence that the duty incidence was in fact passed on, and not on an assumption drawn only from the accounting entry.

Conclusion: The refund was not hit by unjust enrichment and the assessee was entitled to the refund with applicable interest.

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