Refund of duty paid through RG 23A Part II must be re-credited, not paid in cash, when the credit account remains operative.

Duty discharged through RG 23A Part II was treated as payment of duty for refund purposes, so refund could not be refused merely because the duty was paid from the Modvat credit account. Where that account remained operative, the proper mode of restitution was re-credit in RG 23A Part II, not cash refund, because cash payment was confined to exceptional cases under the relevant rules. The discussion also notes that unjust enrichment did not defeat the claim where the duty incidence had been passed on to the customer, leaving refund admissible if otherwise legally due.

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Issues: Whether duty paid through RG 23A Part II account is a payment of duty eligible for refund, and whether such refund can be granted in cash to the customer of the excisable goods.

Analysis: Payment through RG 23A Part II was treated as payment of duty, so refund could not be denied merely because the duty was discharged through the Modvat credit account. The refund was, however, not payable in cash because RG 23A Part II is a credit account and, where the account is in operation, the appropriate mode of refund is re-credit in that account. Cash refund was viewed as exceptional and confined to situations covered by the relevant rules, which were not applicable here. The principle of unjust enrichment did not bar the refund claim where the incidence of duty had been passed on to the customer.

Conclusion: Duty paid through RG 23A Part II was held refundable if otherwise admissible, but not in cash; the refund had to be credited to RG 23A Part II account where that account was operative.

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