Unjust enrichment rebuttal in central excise refund: unchanged sale price and absorbed duty supported admissibility of refund.

Refund of differential central excise duty paid under protest on reclassification was held not to be barred by unjust enrichment. The Tribunal treated Section 12B of the Central Excise Act, 1944 as creating a rebuttable presumption of passing on the duty burden, and found that the assessee rebutted it by showing that the sale price remained unchanged and the excess duty was not recovered from customers. Separate indication of duty in invoices was held not conclusive by itself. The Tribunal also accepted that duty later debited in PLA on the dharmada amount was not hit by the same presumption on the facts, and the refund was admissible.

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Issues: Whether the refund of differential central excise duty paid under protest on reclassification of the goods was barred by unjust enrichment.

Analysis: The duty was paid pursuant to departmental directions requiring reclassification, and the assessee asserted that the total invoice price remained unchanged before and after reclassification. The record showed that the duty was separately indicated in invoices, but that circumstance by itself was not conclusive of passing on the burden. The Tribunal held that the statutory presumption under Section 12B of the Central Excise Act, 1944 is rebuttable, and on the facts the assessee had shown that the excess duty had not been recovered from customers. The Tribunal also accepted that duty paid subsequently by debit in PLA on the dharmada amount was not hit by the same presumption in the manner found by the lower authority.

Conclusion: The refund claim was not barred by unjust enrichment and was admissible to the assessee.

Ratio Decidendi: Where the assessee rebuts the statutory presumption of passing on the duty burden by showing that the sale price remained unchanged and the incidence of duty was absorbed by it, refund cannot be denied on the ground of unjust enrichment.

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