Unjust enrichment does not bar customs refund where imported inputs were consumed in manufacture and not sold onward.

The amended refund scheme under Section 27 of the Customs Act permits refund to the claimant where the incidence of duty has not been passed on to another person. Imported epoxy resin was consumed as an input in manufacture and was not sold as such, so the duty burden was not passed on in the direct sense contemplated by the provision. The difficulty of tracing the ultimate incidence of duty did not justify denying refund on unjust enrichment grounds, and the reasoning in Solar Pesticides Pvt. Ltd. was followed. The refund claim was therefore not barred by the doctrine of unjust enrichment.

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Issues: Whether the doctrine of unjust enrichment under Section 27 of the Customs Act, 1962 applies to a refund claim where imported inputs were consumed in manufacture and were not sold to any buyer.

Analysis: The amended refund scheme under Section 27 permits payment of the refundable amount to the claimant if the incidence of duty has not been passed on to any other person. The imported epoxy resin was not sold as such but used as an input in manufacture of final products. In such a case, the burden of import duty is not passed on in the direct sense contemplated by the provision, and the difficulty of tracing its ultimate incidence does not justify denying refund on the ground of unjust enrichment. The reasoning of the Bombay High Court in Solar Pesticides Pvt. Ltd. was followed.

Conclusion: The doctrine of unjust enrichment does not apply to the refund claim in these facts, and the appellant is entitled to have the claim considered without that bar.

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