Unjust enrichment bars refund of indirect tax where the duty burden was passed on and not proved otherwise.

Refund of indirect tax or excise duty is maintainable only where the claimant proves that the duty burden was not passed on to buyers, because otherwise the claim is barred by unjust enrichment. On the facts, the claimant had not pleaded or proved that it bore the incidence of duty, and the record indicated that the duty element had already been recovered through the parties' commercial arrangement. A fresh factual inquiry was declined at the appellate stage because no such plea had been raised before the authorities or the Single Judge. The refund claim was therefore rejected as unsustainable.

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Issues: Whether refund of excise duty could be granted when the claimant had passed on the burden of duty to buyers and had not pleaded or proved that the burden was borne by it.

Analysis: In light of the law declared by the Supreme Court, a refund claim for indirect tax or duty is maintainable only when the claimant establishes that the burden of duty has not been passed on to another person. Where the incidence of duty has been passed on, the claimant suffers no real loss and cannot seek refund. The Court also declined to permit a fresh factual inquiry at the appellate stage when no such plea had been taken before the authorities or the learned Single Judge, and the record showed that the duty element had already been returned through the commercial arrangement between the parties.

Conclusion: The refund claim was not sustainable and was rejected.

Ratio Decidendi: A refund of indirect tax or duty can be allowed only if the claimant proves that the incidence of duty has not been passed on, since otherwise the claim is barred by unjust enrichment.

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