Unjust enrichment applies to captively consumed imported raw material; Tribunal view rejected and duty-pass-on issue remanded.

The doctrine of unjust enrichment under Section 27 of the Customs Act applies to imported raw material even where it is captively consumed in the manufacture of the final product and not sold. A three-Judge Supreme Court ruling on the point made the Tribunal's contrary view unsustainable, so the Tribunal's order was set aside. The question whether the duty incidence had in fact been passed on was not decided and was left for determination on remand.

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Issues: Whether the doctrine of unjust enrichment applies where imported raw material is captively consumed in the manufacture of the final product and not sold.

Analysis: The binding three-Judge decision on the point held that the principle of unjust enrichment under Section 27 of the Customs Act applies even when the imported raw material is captively consumed in the manufacture of the final product. In light of that ruling, the Tribunal's view that the doctrine did not apply could not be sustained. The question whether the incidence of duty had been passed on was not adjudicated and was left for determination on remand.

Conclusion: The doctrine of unjust enrichment is applicable to captively consumed imported raw material. The Tribunal's order was set aside and the matter was remanded for consideration of whether the duty incidence had been passed on.

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