1998 (3) TMI 241

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....able in terms of Section 59A(1) of the Customs Act, 1962 and subsequently cleared the goods. It was found that the duty payable was much less than the amount deposited intially. The duty paid already was adjusted towards duty finally found payable. Appellant filed a refund claim for the amount of deposit less the duty found payable and adjusted. All these transactions took place subsequent to the amendment of Section 27 of the Act. 2. The Asstt. Commissioner rejected the claim on the ground that the Modvat documents and evidence to show that the burden of duty had not been passed on to the buyers had not been produced. The Collector (Appeals) sustained the order on the ground of "unjust enrichment", relying on the decision of the Di....

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....held that the scheme is designed for a situation where the importer sells the imported goods, either directly passes on the incidence of duty to the buyer or does not and only in the latter case refund will be made. If the duty is passed on to the buyer the right to recover the duty is also passed on to the buyer, provided, that the buyer has not in turn, sold the goods and passed on the burden of duty to a next buyer. It cannot arise, in a case where the imported goods have been used in the manufacture of other goods and the burden of duty has not been passed on directly. Taking note of the circumstances that the import duty paid on the input may become a part of the cost of manufacture of the final product, the Court indicated the difficu....