Unjust enrichment does not bar refund where the contract price excluded excise duty and the burden was not passed on.

Where the contractual price and contemporaneous correspondence showed that no excise duty element was built into the supply price, the duty burden was not treated as passed on to the buyer. The doctrine of unjust enrichment therefore did not bar refund of duty paid under protest, and the direction to credit the amount to the Consumer Welfare Fund could not be sustained. The refund was held admissible to the claimant.

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Issues: Whether the refund claim was barred by unjust enrichment on the ground that the excise duty burden had been passed on to the Railways, and whether the appellant was entitled to refund of the duty paid under protest.

Analysis: The contract price and the subsequent correspondence from the Railways showed that the supply price had been fixed on a consolidated basis and that no amount was provided towards excise duty, with one communication expressly stating that excise duty was nil. On these facts, the Tribunal held that the price did not include any element representing Central Excise duty and, therefore, the duty burden had not been shifted to the buyer. Following the earlier Tribunal view that the bar of unjust enrichment does not apply where the contractual price does not include excise duty, the direction to credit the refund to the Consumer Welfare Fund could not be sustained.

Conclusion: The refund was held to be admissible to the appellant and the objection based on unjust enrichment was rejected.

Ratio Decidendi: Where the contractual price, supported by contemporaneous correspondence, shows that no excise duty element was built into the price, the doctrine of unjust enrichment does not bar refund of duty paid under protest.

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