1998 (3) TMI 241

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..... ustoms Act, 1962 and subsequently cleared the goods. It was found that the duty payable was much less than the amount deposited intially. The duty paid already was adjusted towards duty finally found payable. Appellant filed a refund claim for the amount of deposit less the duty found payable and adjusted. All these transactions took place subsequent to the amendment of Section 27 of the Act. 2. The Asstt. Commissioner rejected the claim on the ground that the Modvat documents and evidence to show that the burden of duty had not been passed on to the buyers had not been produced. The Collector (Appeals) sustained the order on the ground of "unjust enrichment", relying on the decision of the Division Bench of the High Court of Madras i .....

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..... here the importer sells the imported goods, either directly passes on the incidence of duty to the buyer or does not and only in the latter case refund will be made. If the duty is passed on to the buyer the right to recover the duty is also passed on to the buyer, provided, that the buyer has not in turn, sold the goods and passed on the burden of duty to a next buyer. It cannot arise, in a case where the imported goods have been used in the manufacture of other goods and the burden of duty has not been passed on directly. Taking note of the circumstances that the import duty paid on the input may become a part of the cost of manufacture of the final product, the Court indicated the difficulty in ascertaining how much of the original impor .....

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..... sion referred to above. 9. In this view, we hold that the doctrine of unjust enrichment recognised in Section 27 of the Act will not apply to the present case where the imported input was used in the manufacture of another product and was not sold to any buyer. That being so, the appellant would be entitled to have refund claim considered free from trammels of "unjust enrichment" contained in Section 27 of the Act. 10. We, therefore, set aside the impugned orders and remand the refund claim to the jurisdictional authority for verification of the amount in question and for passing fresh order untrammelled by the doctrine of "unjust enrichment" in Section 27 of the Act. The appeal is allowed.
Case laws, Decisions, Judgements, .....

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