Tribunal Overturns Order, Grants Appeal: Unjust Enrichment Doctrine Not Applicable as Goods Were Unsold.

The Tribunal set aside the impugned order and allowed the appeal, granting consequential relief to the appellant. It determined that the doctrine of unjust enrichment did not apply since the goods were not sold, and the duty incidence did not transfer to a buyer. The Ld. Commissioner (Appeals) erred in applying the unjust enrichment bar.

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Issues:
Refund claim rejection based on unjust enrichment.

Analysis:
The appellant filed a refund claim after paying Basic Customs Duty (BCD) @ 5% during import, whereas the actual rate was 2%. The adjudicating authority initially allowed the refund claim, but it was rejected on appeal by the Revenue citing unjust enrichment. The main question was whether the bar of unjust enrichment applied when the goods were not sold by the appellant.

The Tribunal noted that the goods in question were not sold by the appellant, and therefore, the duty incidence on the buyer did not arise as the goods were still in the appellant's possession. The Tribunal referred to the case law of Mafat Lal Industries Ltd. v. Union of India [1997 (89) E.L.T. 247 (S.C.)] to support the position that unjust enrichment is not applicable when goods are not sold. The Ld. Commissioner (Appeals) erred in requiring the appellant to pass the bar of unjust enrichment in such circumstances.

Consequently, the Tribunal found no merit in the impugned order and set it aside. The appeal was allowed, and any consequential relief was granted to the appellant.

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