Interest on warehoused goods cannot survive once adjusted duty is fully discharged; unjust enrichment does not bar refund of interest.

Interest on warehoused goods was stated to be payable only on the subsisting duty liability under the Customs Act, and where duty had been adjusted under the statutory mechanism and no further duty remained payable, the corresponding interest could not survive independently. The note also states that a refund claim for interest was not treated as a refund of duty, so the doctrine of unjust enrichment did not apply on those facts. On that basis, the appellants were held entitled to relief, the objection based on unjust enrichment failed, and consequential relief followed.

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Issues: (i) whether interest was payable on the warehoused goods in the 42 cases where the duty liability stood adjusted and no further duty remained payable; (ii) whether the claim for refund of interest was barred by unjust enrichment.

Issue (i): whether interest was payable on the warehoused goods in the 42 cases where the duty liability stood adjusted and no further duty remained payable.

Analysis: Under Section 59A of the Customs Act, 1962, the importer was required to deposit fifty per cent of the assessed duty and the balance was adjusted against the duty finally payable. Section 61(3) of the Customs Act, 1962 made interest payable only on the amount of duty for the period specified therein. The duty position in the present cases showed that, after adjustment under Section 59A(2), no further amount remained payable and refund of the differential duty was admitted. Applying the principle that interest is only an accessory to the principal liability, once the principal duty itself did not survive, the corresponding interest liability could not survive independently.

Conclusion: No interest was payable in the 42 cases, and the appellants were entitled to relief on this issue.

Issue (ii): whether the claim for refund of interest was barred by unjust enrichment.

Analysis: The claim before the Tribunal was for refund of interest, not refund of duty. The doctrine of unjust enrichment was therefore not attracted on the facts found, because the amount in question did not represent a duty refund claim of the kind ordinarily governed by that bar.

Conclusion: The objection based on unjust enrichment failed.

Final Conclusion: The impugned order was unsustainable, the appellants succeeded, and the appeals were allowed with consequential relief.

Ratio Decidendi: Interest on warehoused goods is incidental to the subsisting duty liability and cannot be recovered where, after statutory adjustment, no duty remains payable; a claim for refund of interest is not treated as a duty refund so as to attract unjust enrichment.

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