Special Additional Duty refund and unjust enrichment: documentary proof showing no pass-through makes rejection unsustainable.

Refund of Special Additional Duty on import was found not to be barred by unjust enrichment where the importer supported the claim with sales invoices, a declaration that no additional customs duty credit had been passed on, VAT payment records, a Chartered Accountant's certificate, and balance-sheet treatment showing the amount as receivable from Customs. On those facts, the incidence of SAD was held not to have been passed on to the buyer, so rejection of the refund on unjust enrichment was unsustainable.

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Issues: Whether refund of Special Additional Duty paid on import was barred on the ground of unjust enrichment.

Analysis: The refund claim was examined in the light of the sales invoice, the declaration that no credit of additional customs duty had been passed on, the payment of VAT through the sale tax account, the Chartered Accountant's certificate, and the balance-sheet treatment showing the amount as receivable from Customs. On these facts, the burden of SAD was found not to have been passed on to the buyer. The Commissioner (Appeals) was therefore held to have erred in sustaining rejection of the refund on unjust enrichment.

Conclusion: The refund of SAD was held to be admissible and the appeal was allowed.

Ratio Decidendi: Where the importer substantiates by invoice records, tax payment documents, and auditor certification that the incidence of SAD has not been passed on to the buyer, rejection of SAD refund on the ground of unjust enrichment is unsustainable.

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