Customs refund and unjust enrichment: duty on goods consumed in manufacture was not treated as passed on.

Refund of additional customs duty on imported silica crucibles was examined under the amended customs refund scheme, with the court noting that Sections 27(2) and 27(3), read with Sections 28C and 28D of the Customs Act, operate as a complete code and permit refund where the incidence of duty has not been passed on. The undisputed fact that the crucibles were consumed in manufacture of synthetic gems, and not resold to third parties, meant the duty burden was not transferred to any buyer. On that basis, the claim fell within Section 27(2)(a) and/or (b), and unjust enrichment did not bar refund. The writ route was treated as available notwithstanding the statutory refund mechanism.

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Issues: Whether refund of additional customs duty could be granted in writ jurisdiction notwithstanding the amended refund mechanism under Section 27 of the Customs Act, 1962, and whether the doctrine of unjust enrichment barred refund where the imported silica crucibles were used by the importer in manufacture and were not sold to third parties.

Analysis: The claim arose from duty collected on imported silica crucibles and the Court noted that the right to refund had crystallised after the later tribunal ruling, by which time the six-month limitation under Section 27(1) had expired. The amended scheme in Sections 27(2) and 27(3), read with Sections 28C and 28D of the Customs Act, 1962, was examined as a complete refund code designed to deny refund only where the incidence of duty had been passed on. The Court accepted the undisputed factual position that the imported goods were not resold but were consumed in the manufacture of synthetic gems, so the burden of duty had not been transferred to any buyer. On that basis, the case fell within the protective scope of Section 27(2)(a) and/or (b), and the doctrine of unjust enrichment did not apply.

Conclusion: Refund was held payable to the petitioner, and the objection that the petitioner must first pursue the statutory refund route before the Assistant Collector was rejected.

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