Unjust enrichment bars cash refund of customs duty where the importer cannot prove the duty burden was not passed on.

A sanctioned refund of customs duty was not payable to the importer in cash because the importer failed to prove that the duty burden had not been passed on to buyers. The books showed depreciation on the imported goods on the full cost, including the duty element, and the explanation that this did not affect the final product was rejected. As the burden of disproving unjust enrichment was not discharged, the refund was required to be credited to the Consumer Welfare Fund instead of being paid to the claimant.

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Issues: Whether the refund of customs duty, though sanctioned on merits, was liable to be credited to the Consumer Welfare Fund instead of being paid to the importer on account of unjust enrichment.

Analysis: The refund claim had been allowed on merits, but the importer was required to establish that the incidence of duty had not been passed on to buyers or customers. The books of account showed depreciation on the imported goods on the full cost including the duty element, and the explanation that this did not affect the final product was not accepted. On the material before it, the importer had not discharged the burden of proving absence of passing on of duty incidence.

Conclusion: The bar of unjust enrichment applied, and the direction to credit the refund amount to the Consumer Welfare Fund was upheld.

Final Conclusion: The appeal failed and the refund was not payable to the importer in cash.

Ratio Decidendi: A sanctioned refund of customs duty cannot be paid to the claimant if the claimant fails to prove that the duty burden was not passed on, in which event the doctrine of unjust enrichment requires credit to the Consumer Welfare Fund.

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