Unjust enrichment does not bar refund of excess duty under the compounded levy scheme where liability is based on production capacity.

Under the compounded levy scheme, duty is fixed by annual production capacity rather than actual clearances, so the scheme operates as a self-contained code. On that basis, the Tribunal held that the general refund restriction in Section 11B, including the bar of unjust enrichment, does not govern excess duty paid under this special levy mechanism because the payment cannot be linked to any specific sale or presumed to have been passed on to customers. The Revenue's appeal failed.

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Issues: Whether the bar of unjust enrichment under Section 11B of the Central Excise Act, 1944 applies to refund of excess duty paid under the compounded levy scheme based on annual production capacity.

Analysis: The refund arose from duty paid under a special compounded levy arrangement where liability was fixed with reference to annual production capacity and not to actual clearances. The Tribunal treated the scheme as a self-contained code and relied on earlier decisions holding that general provisions of excise law, including Section 11B, do not govern such a special levy mechanism. Since duty under the scheme is payable irrespective of sale or clearance, excess payment cannot be linked to any particular transaction or presumed to have been passed on to customers in the manner contemplated by unjust enrichment.

Conclusion: The bar of unjust enrichment does not apply to refund of excess duty paid under the compounded levy scheme, and the Revenue's appeal fails.

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