Unjust enrichment in refund claims for imported natural rubber required fresh adjudication on evidence and passing-on of duty

Refund claims for additional duty paid on imported natural rubber were required to be examined on the specific question of unjust enrichment. The assessee contended that the rubber was captively consumed and that the duty incidence had not been passed on, supported by a Chartered Accountant's certificate. As the earlier rejection had been on merits, the evidence on unjust enrichment had not been fully considered. The Tribunal therefore directed fresh adjudication on the refund claims, with opportunity to produce evidence and be heard, and with reference to Allied Photographics India.

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Issues: Whether the refund claims arising from payment of additional duty on imported natural rubber were liable to be rejected on the ground of unjust enrichment.

Analysis: The matter was remanded by the Supreme Court specifically for consideration of unjust enrichment. The assessee asserted that the imported rubber had been captively consumed and that the incidence of duty had not been passed on, relying on a Chartered Accountant's certificate. The Revenue relied on the principle that retention of sale price after assessment is not by itself sufficient to displace the bar of unjust enrichment, and the evidence had not yet been examined by the original authority because the earlier rejection was on merits. The Tribunal therefore held that the refund issue required fresh consideration on evidence, with opportunity to adduce proof and to be heard, and with reference to the ruling in Allied Photographics India.

Conclusion: The refund claims were not finally decided on merits and were sent back for fresh adjudication on the question of unjust enrichment.

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