Refund claims and protest payments: informal notice can suffice, but unjust enrichment still defeats refund without proof of non-passing of duty.

A refund claim was not time-barred merely because the duty was not paid under a rigid formal protest format, where audit-triggered differential duty payments were accompanied by letters sufficiently informing the Department that the payments were under protest. However, the refund still failed because the assessee did not rebut the statutory presumption of unjust enrichment: the duty burden was not shown to have remained unpassed, the amounts were treated as expenditure in the books, and there was no convincing proof of non-recovery from customers. The claim therefore succeeded on limitation but was denied on unjust enrichment, with the refundable amount liable to be credited to the Consumer Welfare Fund.

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Issues: (i) Whether the refund claim was barred by limitation on the ground that the duty payments were not made under protest; (ii) Whether the refund was barred by unjust enrichment.

Issue (i): Whether the refund claim was barred by limitation on the ground that the duty payments were not made under protest

Analysis: The payments were made after an audit objection on valuation, and the assessee had addressed letters stating that the differential duty was being paid under protest. The required procedure for protest was not followed in a strict sense, but the record showed sufficient intimation to the Department and no effective rebuttal by it. A mere procedural lapse in the form of protest could not defeat the substantive assertion that the payments were not voluntary.

Conclusion: The refund claim was not barred by limitation on the ground of absence of protest.

Issue (ii): Whether the refund was barred by unjust enrichment

Analysis: The assessee did not produce adequate material to establish that the duty burden had not been passed on. The amounts were reflected as expenditure in the books, and there was no convincing proof of non-recovery from customers or of exclusion from supplementary invoicing. In such circumstances, the statutory presumption against refund operated and the sanctioned amount was liable to be credited to the Consumer Welfare Fund.

Conclusion: The refund was barred by unjust enrichment and was correctly not payable to the assessee.

Final Conclusion: The challenge to limitation succeeded, but the refund still failed because the statutory bar of unjust enrichment remained un-rebutted, leaving no refundable amount payable to the assessee.

Ratio Decidendi: A payment described as being made under protest need not satisfy a rigid formalistic prescription if the Department is sufficiently informed, but refund under Section 11B of the Central Excise Act, 1944 is still denied where the claimant fails to prove that the duty incidence was not passed on.

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