Cash security in project imports is refundable where it is not duty, and unjust enrichment does not bar the refund.

Cash security deposited at the time of registration of a project import contract was treated as a revenue safeguard, not as duty paid on clearance, so the refund machinery under the Customs Act and the bar of unjust enrichment did not apply in the same manner. Relying on a binding High Court ruling on an identical issue and the relevant Board circular, the Tribunal distinguished the Revenue's authorities as factually and legally different. The security deposit was therefore held refundable, and the objection based on credit to the Consumer Welfare Fund was rejected.

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Issues: Whether the cash security deposit made at the time of registration of a project import contract was refundable without attracting the bar of unjust enrichment and whether Section 27 of the Customs Act could be invoked to deny refund by crediting the amount to the Consumer Welfare Fund.

Analysis: The respondent had deposited cash security as part of the project import procedure, and the refund claim arose after finalisation of the project. The Tribunal noted that the deposit was made as a security to safeguard revenue, not as duty paid on clearance, and relied on the Board's circular prescribing the cash security requirement. It accepted the view taken in the binding High Court decision on an identical issue that such security deposit is not equivalent to duty, and therefore the machinery of refund under Section 27 of the Customs Act and the principle of unjust enrichment do not apply in the same manner. The decisions relied on by Revenue were distinguished as dealing with different factual and legal settings.

Conclusion: The cash security deposit was held refundable and the bar of unjust enrichment was held inapplicable; the Revenue's appeal was rejected and the order granting refund was upheld.

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