Unjust enrichment in kerosene refund claims: special notification-based adjustments and credit notes supported refund eligibility

Refund claims under a special kerosene clearance and return scheme were examined against the doctrine of unjust enrichment. The procedure required monthly reconciliation and adjustment under the notification-based mechanism, and the evidence showed that differential duty adjustments were carried through book entries between the supplier and buyer. Subsequent credit notes were treated as consistent with that special procedure and not to be ignored merely because reimbursement followed the original clearance. On that factual and scheme-specific basis, the Section 11B bar was treated as inapplicable in the same manner, and crediting the refund to the Consumer Welfare Fund was considered unjustified.

---

---

Issues: Whether the refund claims arising from the special clearance and return procedure for kerosene were barred by the doctrine of unjust enrichment and were therefore liable to be credited to the Consumer Welfare Fund.

Analysis: The refund claims were made under a specific scheme framed pursuant to the notifications governing supply of kerosene and return of unconsumed quantity, with the Commissioner prescribing the procedure for monthly reconciliation and adjustment. The evidence showed that the differential duty and any refund-related adjustment were carried through book entries between the appellant and the buyer, and this factual position was not disputed. The subsequent issuance of credit notes was held to be consistent with the special procedure and could not be disregarded merely because the reimbursement followed the original clearance. The statutory bar against payment to the applicant under Section 11B did not apply in the same manner in view of the specific notification-based scheme and the nature of the input usage and adjustment mechanism.

Conclusion: The refund claims were not hit by unjust enrichment, and crediting the amount to the Consumer Welfare Fund was held to be unjustified.

---