Unjust enrichment and customs refund: appellate-stage duty deposit was refundable where the importer proved actual user status.

Refund of a duty-related deposit made at the appellate stage under Section 129E of the Customs Act was treated as outside the bar of unjust enrichment where the importer established that it was the actual user of the imported goods. On the facts noted, the incidence of duty was not regarded as having been passed on to consumers, so Sections 27(2) and 28D did not prevent refund. The lower authority's order was therefore set aside and the refund claim was allowed.

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Issues: Whether the refund claim of duty-related deposit was hit by unjust enrichment under Sections 27(2) and 28D of the Customs Act, 1962, when the amount was deposited under Section 129E of the Customs Act, 1962 and the importer was the actual user of the goods.

Analysis: The duty demand arose after clearance of the goods and the amount sought to be refunded was a deposit made at the appellate stage under Section 129E of the Customs Act, 1962. The importer had shown that it was the actual user of the imported goods and had produced material to support that position. In such circumstances, and in light of the principle that unjust enrichment does not apply to actual users of the imported goods, the incidence of duty was not treated as having been passed on to consumers.

Conclusion: The doctrine of unjust enrichment was held inapplicable and the refund was held admissible to the importer.

Final Conclusion: The order of the lower authority was set aside and the refund claim succeeded.

Ratio Decidendi: Where a refund relates to a deposit made at the appellate stage and the importer establishes that it is the actual user of the imported goods, the bar of unjust enrichment under the Customs Act does not apply if the incidence of duty has not been passed on.

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