2000 (2) TMI 237 - SC - Customs

Whether the doctrine of unjust enrichment is applicable in respect of raw material imported and consumed in the manufacture of a final product?

Held that:- The High Court has not correctly interpreted the relevant provisions of the Customs Act and, in our opinion, the principle of unjust enrichment incorporated in Section 27 of the Act would be applicable in respect of imported raw material and captively consumed in the manufacture of a final product. Whether the incidence of the duty had been passed on to the consumer was not decided by the High Court in Solar Pesticide’s case (1991 (10) TMI 42 - HIGH COURT OF JUDICATURE AT BOMBAY) because in its opinion the principle of unjust enrichment could not apply to the cases of captive consumption. In the case of Solar Pesticide Pvt. Ltd., therefore, we do not go into this question whether the incidence of duty had not been passed on by the respondent. This appeal is, accordingly, allowed and the impugned judgment of the High Court is set aside, the effect of which would be that the writ petition filed by the Solar Pesticide Pvt. Ltd. stands dismissed.