Post-clearance credit notes can defeat unjust enrichment and support refund where duty burden was not passed on.

Credit notes issued after clearance can rebut unjust enrichment where they show the duty burden was not retained by the supplier, and refund cannot be refused on that ground. In this matter, the assessee relied on post-clearance credit notes and a District Collector's certificate evidencing supply of goods for relief purposes under Notification No. 2/2001-C.E.; those materials were treated as sufficient to show that the incidence of duty had not been passed on. The further insistence on purchase orders and cheque particulars was found unnecessary on the facts. The refund claim was therefore allowed.

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Issues: Whether the refund claim was barred by unjust enrichment despite the issuance of credit notes and the fulfillment of the exemption notification conditions.

Analysis: The refund was rejected below on the premise that the incidence of duty had been passed on. The assessee relied on credit notes issued to the buyer after clearance and on the certificate of the District Collector showing supply of goods for relief purposes under Notification No. 2/2001-C.E. dated 27-1-2001. The credit notes were treated as sufficient evidence that the duty burden had been reimbursed to the buyer, and the additional insistence on purchase orders and cheque particulars was found unnecessary in the facts of the case.

Conclusion: The bar of unjust enrichment was held not to apply, and the refund claim was allowed.

Ratio Decidendi: Where post-clearance credit notes or equivalent book adjustments establish that the duty burden was not retained by the seller, refund cannot be denied on the ground of unjust enrichment.

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