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2023 (3) TMI 844 - HC - CustomsApplicability of doctrine of unjust enrichment to claims of refund made prior to the introduction of Section 11 B of the Central Excise Act, 1944 and Section 27 (1A) of the Customs Act, 1962 - applicability of the doctrine to capital goods, raw material/ test material. HELD THAT:- The view of the Tribunal that in the absence of an express provision the doctrine of unjust enrichment cannot be applied is contrary to the judgment of the Hon’ble Supreme Court in the case of SAHAKARI KHAND UDYOG MANDAL LTD. VERSUS COMMISSIONER OF C. EX. & CUS. [2005 (3) TMI 116 - SUPREME COURT], wherein it was held that the doctrine of “unjust enrichment” is based on equity and has been accepted and applied in several cases. In our opinion, therefore, irrespective of applicability of Section 11-B of the Act, the doctrine can be invoked to deny the benefit to which a person is not otherwise entitled. Section 11-B of the Act or similar provision merely gives legislative recognition to this doctrine. That, however, does not mean that in the absence of statutory provision, a person can claim or retain undue benefit. Before claiming a relief of refund, it is necessary for the petitioner-appellant to show that he has paid the amount for which relief is sought, he has not passed on the burden on consumers and if such relief is not granted, he would suffer loss. The Hon’ble Supreme Court in the case of COMMNR. OF CENTRAL EXCISE, CHENNAI-III VERSUS GRASIM INDUSTRIES [2015 (4) TMI 389 - SUPREME COURT] had held that the unjust enrichment will also apply to the capital goods, inputs and raw materials and any claim for refund ought to be tested by examining whether the higher duty paid has led to higher costing/price of the final product which should be demonstrated by the assessee to be in the negative to claim the benefit of refund. It thus appears that the order of the Tribunal insofar as it holds that the doctrine of unjust enrichment is not applicable to the facts is erroneous. In view of the same, the matter is remanded back to the original authority to decide the claim of the Respondent/Assessee to refund applying the doctrine of unjust enrichment after giving the Respondent/Assessee a reasonable opportunity. Appeal allowed by way of remand.
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