Doctrine of Unjust enrichment

· In UOI Vs. Solar Pesticides (P) Ltd. (2000) it has been held that the provisions of unjust enrichment is applicable also in respect of captive consumption of inputs.

· In C.C.Ex Vs Allied Photographics (Sc – 2004) it has been held that the doctrine of unjust enrichment applies even when duty has been paid under protest.

When the manufacturer pays duty under protest, he will charge the buyer in respect of the demand to which he agrees. Remaining part is borne by him. Hence, that part of the incidence is not transferred and refund can be claimed thereof.

· The CESTAST has held in Grasim Industries Vs. C.C.Ex (2003) that the judgment in case of solar pesticides is applicable only in case of captive consumption of inputs and not in case of captive consumption of capital goods.

· It has been held in Somaeya organics Vs. State of Uttar Pradesh (2001) that where the duty is held to be illegal, the doctrine of unjust enrichment will not apply.

· It duty is paid on provisional basis; the doctrine of just enrichment will apply. [Rule 7(6)]

However, in customs Act, it has been held that provisional of unjust enrichment are not applicable of duty is paid on provisional basis [Escorts Yahama Motors Vs. C.C. (Cegat – 2000)].

· In Harish Textile Engg. Ltd. Vs. C.C.Ex (CEGAT – 1995) it has been held that the doctrine of unjust enrichment does not apply in case of pre – deposit of duty of filing the appeal.

C.C. Vs. Atlas Granites (Tribunal – 2004):

Payment of duty on direction of DCFT and not on own volition of assessee is to be treated as under protest and refund shall be allowed subject to verification of unjust enrichment.