Refund under protest escapes limitation, but cash refund is barred unless the duty burden is proved not passed on.

Duty paid under an interim court order in pending writ proceedings is treated as payment under protest, so the separate protest requirement under Rule 233B does not apply and the six-month limitation for refund under Section 11B(1) is excluded. However, a cash refund remains subject to unjust enrichment under Section 11B(2), and the claimant must prove that the duty burden was not passed on. On the facts, that burden was not discharged because the pleadings indicated that buyers, including Government-nominated bodies, would bear the incidence. Refund was therefore not payable in cash and was confined to credit to the Consumer Welfare Fund.

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Issues: (i) Whether the refund claim was barred by limitation under Section 11B(1) of the Central Excise Act. (ii) Whether the refund was barred by unjust enrichment under Section 11B(2) of the Central Excise Act.

Issue (i): Whether the refund claim was barred by limitation under Section 11B(1) of the Central Excise Act.

Analysis: Duty had been paid pursuant to an interim court order in pending writ proceedings. Payment made under an order of court is treated as payment under protest, and in such a case the requirement of separate protest under Rule 233B of the Central Excise Rules, 1944 does not apply. Once the payment is treated as under protest for the purposes of Section 11B, the six-month limitation in Section 11B(1) does not govern the refund claim.

Conclusion: The refund claim was not barred by limitation and the objection under Section 11B(1) failed.

Issue (ii): Whether the refund was barred by unjust enrichment under Section 11B(2) of the Central Excise Act.

Analysis: The claim for refund in cash required proof that the incidence of duty had not been passed on to another person. The assessee did not discharge that burden. The pleadings contained an admission indicating that the duty incidence would be borne by the buyers, namely Government or Government-nominated bodies. The plea based on provisional assessment under Rule 9B of the Central Excise Rules, 1944 was not accepted.

Conclusion: The refund claim was hit by unjust enrichment under Section 11B(2), so cash refund was not admissible.

Final Conclusion: The assessee succeeded on limitation and failed on unjust enrichment, resulting in refund relief only by credit to the Consumer Welfare Fund rather than cash disbursement.

Ratio Decidendi: Duty paid under an interim court order in pending proceedings is treated as payment under protest for Section 11B, excluding the statutory limitation for refund, but cash refund remains subject to the bar of unjust enrichment unless non-passing of the duty burden is proved.

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