Unjust enrichment in refund claims bars reimbursement where duty burden was passed on despite later debit notes.

Refund claimed on the basis of mistaken duty classification remained subject to the unjust enrichment bar because the decisive question was whether the duty burden had been passed on to buyers. The Tribunal held that later debit notes issued by customers did not undo unjust enrichment where the burden had already been passed on at clearance; the earlier Addison & Co. principle was applied, and the contrary authority was distinguished on its facts because contemporaneous debit notes and ledger entries there showed a continuing buyer liability. The refund was therefore directed to the Consumer Welfare Fund under Section 11B.

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Issues: Whether the refund claim was barred by unjust enrichment and was therefore liable to be transferred to the Consumer Welfare Fund.

Analysis: The refund had been claimed on the footing that duty had been paid under a mistaken classification. The decisive question was whether the duty burden had been passed on to the buyers. The Tribunal applied the principle that subsequent debit notes issued by customers do not rebut unjust enrichment where the burden had already been passed on at the time of clearance. The earlier decision in Addison & Co. was held applicable, while the decision relied upon by the appellant was distinguished on its facts because there the debit notes and ledger entries supported a continuing liability from buyers.

Conclusion: The refund was rightly directed to the Consumer Welfare Fund under Section 11B, and the appeal failed.

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