Unjust enrichment and duty refund: accounting treatment alone does not prove passing on of excise duty incidence.

Refund claims for duty paid under protest were not barred by unjust enrichment where the assessee showed that the duty burden was not passed on to customers. Booking the duty as expenditure in the profit and loss account was not, by itself, enough to prove recovery from buyers. The deciding factor was the factual evidence that the new cement unit was operating at a loss, sales realizations were below cost of production, and the Chartered Accountant certificate and supporting financial records showed no passing on of incidence. In the absence of contrary proof from the department, the refund was properly sanctioned with interest.

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Issues: Whether the refund claims of duty paid under protest were hit by the bar of unjust enrichment, particularly because the duty element was shown as expenditure in the books of account and whether the Chartered Accountant certificate was sufficient to show that the incidence of duty had not been passed on.

Analysis: The appeals turned on whether the assessee had shifted the burden of excise duty to its customers during the relevant period when the new cement unit was running at a loss and sales realizations were below the cost of production. The mere fact that duty was booked as expenditure in the profit and loss account was held to be irrelevant by itself, because book treatment does not establish that the burden was recovered from buyers. The Court relied on the principle that the Revenue must show, on the facts, that the incidence of duty was actually passed on. The Chartered Accountant certificate and supporting financial material were accepted as sufficient evidence in the absence of contrary proof from the department.

Conclusion: The bar of unjust enrichment did not apply, the refund claims were rightly sanctioned, and the assessee was entitled to refund along with interest.

Ratio Decidendi: Mere accounting treatment of duty as expenditure in the books does not, by itself, raise a presumption of passing on the duty incidence; unjust enrichment must be established on the basis of cogent evidence showing that the burden was actually recovered from customers.

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