Customs duty refund and delayed-interest rules applied where evidence showed the duty burden was not passed on to buyers.

Customs duty refund was held not to be barred by unjust enrichment where sales register, credit invoices and cost records showed the duty burden had not been passed on to buyers; the accounting entry alone was insufficient, so the direction to credit the amount to the Consumer Welfare Fund was set aside. The court also noted that statutory interest under Section 27A applies to refundable customs duty once the refund remains unpaid beyond the prescribed period after the application is received, and interest was therefore payable on the delayed refund.

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Issues: (i) Whether the refund claim arising from customs duty paid on imported Palmolein oil was hit by unjust enrichment and required credit to the Consumer Welfare Fund. (ii) Whether interest was payable on the refund amount under the Customs Act.

Issue (i): Whether the refund claim arising from customs duty paid on imported Palmolein oil was hit by unjust enrichment and required credit to the Consumer Welfare Fund.

Analysis: The refund dispute had already been remanded for a limited enquiry on whether the incidence of duty had been passed on. The records before the Assessing Authority showed that the imported goods were sold in August 2001, while the differential duty was paid only in September 2001. The sales register, credit invoices, and cost-breakup supported the conclusion that the burden of duty was not passed on to buyers. The authority erred in treating the accounting entry alone as decisive and in not following the remand directions with proper judicial discipline.

Conclusion: The refund was not barred by unjust enrichment and the impugned order denying refund was liable to be set aside in favour of the assessee.

Issue (ii): Whether interest was payable on the refund amount under the Customs Act.

Analysis: Interest under Section 27A applies to duty ordered to be refunded under Section 27 when the refund is not made within three months from the date of receipt of the application. The claim in the present case was for excess customs duty paid pursuant to a dispute over the applicable rate of duty, not for a levy that was unconstitutional or collected without authority of law. The statutory interest provision therefore applied once the refund remained unpaid beyond the prescribed period.

Conclusion: Interest was payable on the refunded amount under Section 27A of the Customs Act, 1962.

Final Conclusion: The refund claim succeeded, the order directing credit to the Consumer Welfare Fund was set aside, and statutory interest on the refunded duty was directed to be paid.

Ratio Decidendi: Where a refund of customs duty is supported by evidence showing that the duty incidence was not passed on, unjust enrichment does not apply, and interest on delayed refund follows the statutory scheme governing refunds of duty.

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