Bank Guarantee Encashment Not Duty Payment; Unjust Enrichment Doctrine Inapplicable

Patanjali Foods Limited Vs Union of India & Ors. (Supreme Court of India)

Supreme Court held that arbitrary encashment of the bank guarantees cannot be treated as payment of duty or duty paid by a claimant. Thus, the doctrine of unjust enrichment or Section 27 of the Customs Act would not be applicable. Accordingly directed to refund amount covered by bank guarantee.

Facts- The assessee imported certain quantity of crude degummed soyabean oil of edible grade in bulk at Jamnagar and filed bill of entry on 02.09.2002 seeking clearance of the imported goods

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