Refund on duty paid again for returned goods was held maintainable; limitation and unjust enrichment objections failed.

Refund of duty paid again on the subsequent clearance of returned goods was held not to be time barred, as the claim related to the later duty payment and the limitation objection was unsustainable on the recorded facts. The doctrine of unjust enrichment was also held inapplicable because the earlier duty burden had already been absorbed when the goods were returned, no credit had been taken, and the second duty payment was the amount sought to be refunded. The refund claim was therefore maintainable and the revenue challenge failed.

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Issues: (i) Whether the refund claim in respect of duty paid again on the subsequent clearance of returned goods was barred by limitation. (ii) Whether the refund was hit by unjust enrichment.

Issue (i): Whether the refund claim in respect of duty paid again on the subsequent clearance of returned goods was barred by limitation.

Analysis: The returned goods were brought back after reversal of 95% of the duty by the customer, and the subsequent duty payment on reprocessed clearance was not disputed. The claim related to the second duty payment made on clearance of the reprocessed material. On the facts recorded, the objection that the claim was time barred with reference to that payment was not sustainable.

Conclusion: The refund claim was not time barred.

Issue (ii): Whether the refund was hit by unjust enrichment.

Analysis: Unjust enrichment could arise only if the duty burden of both payments had been passed on. The first duty element on the returned goods had already been absorbed when the goods were received back, and the respondents had not taken credit of that duty. The later duty payment on clearance was therefore a second payment on which refund was claimed, and the burden of the earlier duty could not be treated as having been recovered from the second customer in a manner attracting unjust enrichment.

Conclusion: The doctrine of unjust enrichment did not apply.

Final Conclusion: The refund claim was maintainable and the revenue challenge failed.

Ratio Decidendi: Where duty is paid again on subsequent clearance of returned goods and the earlier duty burden has been neutralized without credit being taken, the second duty payment is refundable and the bar of unjust enrichment does not apply.

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