Bar of unjust enrichment doesn’t apply as imported goods used for manufacture of final product

Commissioner of Customs Vs Graphite India Limited (CESTAT Kolkata)

CESTAT Kolkata held that question of unjust enrichment in terms of section 27(2) of the Customs Act doesn’t not arise as imported goods are used as raw material for manufacture of final product i.e. imported goods are not sold to someone else.

Facts- The respondent is a manufacturer of Graphite Electrodes. They imported some material/goods from the suppliers of Japan. The respondent is eligible for exemption in duty payment against the materials. They import from Japan upon presentation of Country of Origin Certificate to the Customs Authorities by virtue of Customs Tariff (Determination of Origin of Goods under the Comprehensive Economic Partnership Agreement between the Republic of India and Japan) Rules, 2011, implemented by Notification No.55/2011-Cus (NT) dated 01.08.2011.

The respondent filed 27 Bills of Entry for the clearance of the said goods and paid the Basic Customs Duty at the rate applicable and the goods were allowed to be cleared for home consumption.

Initially, the said refund claims were entertained by the Adjudicating Authority, who rejected refund claims based on the judgment of the Hon’ble Apex Court in the case of ITC Limited Vs, Commissioner of Central Excise, Kolkata IV holding that without challenge/modifying the assessment of Bills of Entry, the refund is not entertainable. In remand proceedings, the adjudicating authority again rejected the refund claims on the ground of unjust enrichment.

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