Refund claims survive when duty is paid under protest and evidence shows the burden was not passed to buyers

Duty paid under protest will not attract a limitation bar where the record supports a timely refund claim, and the objection fails. Refund is also not defeated by unjust enrichment when the assessee's evidence shows the duty incidence was absorbed in its accounts and not passed on to buyers; on those facts, the refund remains admissible. The discussion therefore confirms that both limitation and unjust enrichment depend on the factual record, including protest payment, pricing structure, and accounting evidence of duty absorption.

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Issues: (i) Whether the refund claim was barred by limitation despite payment of duty under protest; (ii) Whether the refund was hit by unjust enrichment on the ground that the duty burden had been passed on to buyers.

Issue (i): Whether the refund claim was barred by limitation despite payment of duty under protest.

Analysis: The duty was found to have been paid under protest, and on that footing the limitation objection could not be sustained. The factual record accepted by the appellate authority supported the conclusion that the claim was within time for refund purposes.

Conclusion: The limitation objection failed and the claim was not barred.

Issue (ii): Whether the refund was hit by unjust enrichment on the ground that the duty burden had been passed on to buyers.

Analysis: The price was a composite price fixed by the Ministry of Agriculture. The Chartered Accountant's certificate and the balance sheet showed that the duty incidence had been absorbed by the firm and reflected as expenditure in the profit and loss account. On those facts, the burden of duty was not passed on to the buyers.

Conclusion: The refund was not barred by unjust enrichment and was admissible.

Final Conclusion: The refund claim was upheld and the revenue challenge failed.

Ratio Decidendi: Where duty is paid under protest and the evidence shows that the incidence of duty has been absorbed by the assessee and not passed on to buyers, the refund claim is not defeated by limitation or unjust enrichment.

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