Warranty replacement imports may qualify for customs exemption, but refund claims still require evidence-based unjust enrichment review.

Imported replacement component parts supplied free of charge by the foreign manufacturer under warranty were treated as covered by the customs exemption, because the notification applied to free warranty replacements and no contrary evidence showed the arrangement fell outside established trade practice. The exemption was therefore available. On refund, the unjust enrichment objection could not be finally bypassed merely on the basis of a Chartered Accountant's certificate and supporting material; the evidence had to be re-examined with reference to the earlier tribunal ruling. The refund issue was remitted for fresh consideration on unjust enrichment.

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Issues: (i) whether the imported replacement component parts were eligible for exemption under the customs notification on the footing that they were supplied free of charge within warranty; (ii) whether the refund claim could be finally allowed without fresh examination of the unjust enrichment objection.

Issue (i): Whether the imported replacement component parts were eligible for exemption under the customs notification on the footing that they were supplied free of charge within warranty.

Analysis: The notification exempted component parts supplied free of charge by the foreign manufacturer in terms of warranty given in accordance with established trade practice. The component parts were admittedly supplied free of cost by the foreign manufacturer. In the absence of evidence to the contrary, and considering the commercial arrangement between buyer and seller regarding warranty, the free replacement supported the conclusion that the goods were covered by warranty within the meaning of the notification.

Conclusion: The exemption under the notification was available to the appellant on this issue.

Issue (ii): Whether the refund claim could be finally allowed without fresh examination of the unjust enrichment objection.

Analysis: The appellate authority had objected that the books of account were not produced to establish that the duty burden had not been passed on. As the appellant relied on a Chartered Accountant's certificate and other supporting material, the proper course was to re-examine the unjust enrichment question with reference to the evidence and the Tribunal's earlier ruling relied upon by the appellant.

Conclusion: The matter on unjust enrichment was required to be reconsidered by the original adjudicating authority.

Final Conclusion: The appellant obtained relief on the exemption issue, but the refund claim was not finally settled and was sent back for fresh decision on unjust enrichment.

Ratio Decidendi: Where replacement goods are supplied free of charge by the foreign manufacturer in accordance with warranty and no contrary evidence is shown, exemption under the notification cannot be denied merely because the replacement occurred after a lapse of time; the unjust enrichment objection must still be examined on evidence.

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