Unjust enrichment in customs refund claims: extra duty deposit was treated as admissible where duty burden was not passed on.

Refund of the extra duty deposit paid during Special Valuation Branch verification is governed by the unjust enrichment test: where the evidence shows that the declared price remained unchanged, the duty incidence was not recovered from buyers, and supporting records such as invoices, delivery challans, books of account and a Chartered Accountant's certificate corroborate that position, the refund cannot be denied. The note also records that the sum was shown as receivable only in the later financial year because the right to refund became certain when Customs accepted that the amount was not payable. On that basis, the refund claim was treated as admissible and not barred by unjust enrichment.

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Issues: Whether the refund claim for the extra duty deposit paid during the Special Valuation Branch investigation was barred by unjust enrichment and whether the incidence of duty had been passed on to buyers.

Analysis: The amount was paid at the instance of the Customs authorities as an extra duty deposit pending verification of invoice value, and the investigation ultimately accepted the declared value. The evidence, including invoices, delivery challans, books of account and a Chartered Accountant's certificate, showed that the price of the goods remained unchanged and that the amount had not been recovered from customers. The explanation for showing the sum as receivable only in the later financial year was accepted, since the refund right became certain only when the Customs authorities confirmed that the amount was not payable. The principle that refund cannot be denied when the duty burden has not been passed on was applied.

Conclusion: The refund claim was not hit by unjust enrichment and was held admissible in favour of the assessee.

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