Unjust enrichment and captive consumption: documentary evidence showed customs duty was not passed on, so refund was payable.

Refund of customs duty on imported sulphur was examined against the doctrine of unjust enrichment. The text states that unjust enrichment can still apply where inputs are captively consumed, because duty may be built into production cost and indirectly passed on. On the documentary evidence, including the chartered accountant's certificate, balance sheets and cost sheets, the duty element was not shown to form part of the manufacturing cost of Bentonite Sulphur and appeared only as amounts receivable in the accounts. As the burden was not proved to have been passed on to customers, the refund was not barred and was to be released to the appellant rather than credited to the Consumer Welfare Fund.

---

---

Issues: Whether the refund of customs duty paid on imported sulphur was hit by unjust enrichment and therefore liable to be credited to the Consumer Welfare Fund instead of being paid to the appellant.

Analysis: The principle of unjust enrichment applies even where the imported goods are captively consumed, because duty may be indirectly passed on by loading it into the cost of production. However, on the basis of the certificate of the chartered accountant, the balance sheet entries, and the cost sheets produced, the customs duty element was not included in the manufacturing cost of Bentonite Sulphur and was reflected only as amounts receivable in the accounts. On these facts, the duty burden was not shown to have been passed on to customers.

Conclusion: The refund claim was not barred by unjust enrichment and the amount was required to be paid to the appellant, not credited to the Consumer Welfare Fund.

Final Conclusion: The appeal succeeded and the refund was directed to be released to the appellant.

Ratio Decidendi: Where documentary evidence shows that customs duty on inputs used in captive manufacture was not embedded in the cost of production or passed on in pricing, the refund is not defeated by unjust enrichment.

---