Refund of duty paid after clearance: limitation under refund rules and unjust enrichment presumption found inapplicable.

Refund of duty paid during the pendency of an appeal against the original demand was treated as outside the limitation period in Rule 11B because the claim arose from the same payment and the prescribed refund time limit was held inapplicable. The doctrine of unjust enrichment was also found not to apply where duty was paid after clearance of the goods, so the Section 12B presumption of passing on duty incidence was not attracted. The contrary findings were set aside and refund was allowed in full.

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Issues: (i) Whether the refund claim was barred by limitation; (ii) whether the refund claim was hit by the doctrine of unjust enrichment.

Issue (i): Whether the refund claim was barred by limitation.

Analysis: The duty was paid during the pendency of the appeal against the original demand, and the refund claim arose from the same duty payment. In such a situation, the prescribed time limit for refund under Rule 11B was held inapplicable to the claim.

Conclusion: The refund claim was not barred by limitation and the finding to the contrary was unsustainable.

Issue (ii): Whether the refund claim was hit by the doctrine of unjust enrichment.

Analysis: The bar of unjust enrichment was found inapplicable because the duty payment was made after clearance of the goods. The presumption under Section 12B that the duty incidence had been passed on was therefore not attracted on the facts. The reliance placed on the captive-consumption ruling was held inapposite.

Conclusion: The refund claim was not hit by unjust enrichment and the contrary finding was unsustainable.

Final Conclusion: The impugned orders were set aside and the refund claim was allowed in full.

Ratio Decidendi: Where duty is paid after clearance of goods pursuant to a demand that is later vacated, the statutory presumption of passing on the incidence of duty does not apply, and the refund claim is not barred by limitation merely because it is filed after such payment.

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