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Refund claim rejection based on unjust enrichment doctrine and burden of duty passed on to buyers. Analysis: The case involved an appellant engaged in manufacturing excisable goods who imported Epoxy Resin and bonded it in a Customs Bonded Warehouse before clearance. The appellant filed a refund claim for the excess amount deposited initially compared to the duty found payable. The Asstt. Commissioner rejected the claim citing lack of Modvat documents showing the burden of duty not passed on to buyers. The Collector (Appeals) upheld the rejection based on unjust enrichment, referring to a High Court decision. The appellant argued that since the imported inputs were not sold but consumed in manufacturing, the burden of duty passing on to buyers was irrelevant. Under the amended Section 27 of the Act, the duty amount can be refunded if not passed on to any other person. The appellant contended that in cases like theirs, where inputs were used in manufacturing final products, the burden of duty passing on to buyers did not arise. They relied on High Court decisions from Bombay and Calcutta supporting their stance. The Respondent, however, cited a different High Court decision to counter the appellant's argument. The Tribunal analyzed various High Court decisions on the issue, including conflicting views from different jurisdictions. They ultimately aligned with the reasoning of the High Court of Bombay, emphasizing that the doctrine of unjust enrichment would not apply when imported inputs were used in manufacturing without being sold to buyers. Therefore, the appellant was entitled to a refund claim without the unjust enrichment constraint. The Tribunal set aside the previous orders, remanding the refund claim for verification and fresh consideration without the unjust enrichment doctrine. The appeal was allowed in favor of the appellant, emphasizing the specific circumstances where the burden of duty passing on to buyers did not apply, leading to the entitlement of the refund claim.
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