Unjust enrichment applies to excise refund claims for duty paid under protest, subject to proof that the burden was not passed on.

Refund of excise duty paid under protest remained governed by Section 11B of the Central Excise Act, 1944, and the doctrine of unjust enrichment applied; payment under protest did not by itself take the claim outside the statutory refund regime. The assessee was therefore required to prove that the duty incidence had not been passed on to customers before refund could be granted. As the existing record was insufficient to decide that factual question, the matter was remitted to the original adjudicating authority for evidence and determination on passing of the duty burden.

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Issues: (i) Whether the bar of unjust enrichment applied to refund of excise duty paid under protest and whether such duty stood outside Section 11B of the Central Excise Act, 1944. (ii) Whether the refund claim could be granted without first determining whether the incidence of duty had been passed on to the customers.

Issue (i): Whether the bar of unjust enrichment applied to refund of excise duty paid under protest and whether such duty stood outside Section 11B of the Central Excise Act, 1944.

Analysis: The governing law drew a distinction between refund under provisional assessment and a refund claim for duty paid under protest. Rule 9B of the Central Excise Rules, 1944 operated in the field of provisional assessment and provided for refund on final adjustment, whereas Section 11B of the Central Excise Act, 1944 governed refund claims and, after the amendment, incorporated the doctrine of unjust enrichment. The Court applied the later three-Judge Bench view that duty paid under protest did not escape Section 11B merely because payment was made under protest, and that the earlier contrary view could not be sustained.

Conclusion: The bar of unjust enrichment was applicable, and the assessee could not claim an automatic exclusion from Section 11B merely because the duty was paid under protest.

Issue (ii): Whether the refund claim could be granted without first determining whether the incidence of duty had been passed on to the customers.

Analysis: The question whether the duty incidence had been passed on was treated as a factual matter requiring adjudication on evidence. Since the existing record was not sufficient for a final finding on that aspect, the matter had to be examined by the original adjudicating authority after allowing the parties to place material in support of their respective stands.

Conclusion: The matter was remitted for factual determination on passing of the duty incidence.

Final Conclusion: The earlier refund order in favour of the assessee could not stand on the legal issue, but the actual entitlement to refund remained dependent on the factual finding regarding passing on of the duty burden.

Ratio Decidendi: Refund of excise duty paid under protest is governed by Section 11B of the Central Excise Act, 1944, and the doctrine of unjust enrichment applies unless the claimant proves that the incidence of duty was not passed on.

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