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The amendments which were made in the Act, inter alia, sought to provide that the manufacturer or importer of goods shall not be entitled to refund of duty of excise or, as the case may be, the duty of customs, if he has already passed on the incidence of such duty to the buyer. The burden of proof that the incidence of the duty has not been passed on to the buyer shall be on the person claiming the refund. The High Court, on interpreting Sections 27, 28C and 28D of the Act, came to the conclusion that the question of unjust enrichment would not arise in the case of captive consumption of the imported raw material. According to it, the question of unjust enrichment would arise under the amended Act when refund is asked for by a person who has sold the imported goods and, in the process, had directly passed on the burden of duty to the buyer. This, according to the High Court, was clear from clauses (a), (b) & (c) of the proviso to Section 27(2) read with the presumption contained in Section 28D of the amended Act.

Sections 28C and D of the Act have been included in the new Chapter VA whose heading is "Indicating amount of duty in the price of goods etc. for the purpose of refund". Section 28C makes it obligatory on other person who is liable to pay duty on any goods to, at the time of clearance of goods, indicate in the documents relating to assessment, sales invoice and other like documents the amount of such duty which will form part of the price on which such goods are to be sold. Section 28D contains a presumption that incidence of duty has been passed on to the buyer, but this presumption is rebuttable. In the absence of proof of such duty not having been passed on to the buyer Section 28D provides that the passing of such duty by the seller to the buyer shall be deemed to have taken place. It was submitted by the learned counsel for the respondent that the scheme of the amending provision should be considered as a whole and Section 27 of the Act should be construed harmoniously with Section 28D of the Act. It was contended that it could not have been the intention to provide for a presumption only in respect of one type of refund and not the other, because the need for presumption would be greater in the case of captive consumption as against re-sale of imported goods as such. The absence of presrnption, therefore, it was submitted, leads to an inference that the provisions of unjust enrichment were not intended to apply to cases of captive consumption.

Section 27(2) of the Act, as already noticed, deals with the cases where application for refund had been made prior to the amendment of the Act in 1991. Sub-section (a) of the proviso is similar to the provisions contained in Section 27(1) of the Act i.e. refund of duty paid by the importer will be allowed if he had not passed on the incidence of such duty to any other person. Section 28C of the Act would have reference to those goods which are cleared and would undoubtedly have no application to the cases of the captive consumption. It is in respect of those goods which are cleared that Section 28C requires a person clearing the goods to indicate the amount of duty paid thereon which will form part of the price at which such goods are to be sold. It is not possible to accept the contention that because Section 28C of the Act cannot be applied in the cases of goods imported for captive consumption, therefore, the principle of unjust enrich-ment would not be applicable in such cases. As we have already indicated, Section 27 of the Act has been re-cast with the amendments made in 1991 and the said section does not necessarily have to be read in conjunction with Sections 27C and D of the Act. If the incidence of duty paid on the imported raw material has not been passed on to any other person, then by virtue of proviso to Section 27(2) of the Act in the case where applica-tion for refund had been made prior to 1991, refund due on the duty paid would be given to the applicant.

Learned Counsel for the respondent had also contended that in cases of captive consumption of imported goods, it would be impossible for the assessee to establish whether the duty component has been passed on to the buyers of the finished products or has been borne by the importer himself. Difficulty in proving that the incidence of the duty borne by the importer has not been passed on lo the purchaser of the finished product can be no ground for interpreting Section 27 differently. It is not possible that in no case will an importer not be able to prove that the incidence of the duty imposed on the imported raw material has not been passed on to any other person. In fact in Civil Appeal No. 4381 of 1999 filed by the Commissioner of Customs against M/s. Surya Roshini Limited, the im-porter had produced certificate from the Chartered Accountants giving details of costing of the final product and the Commissioner (Appeals) found as a fact that the component of excess customs duty paid on the imported raw material had not gone into the costing of the finished product. Without going into the correctness of this finding we wish to emphasize that even in cases of captive consumption, it should be possible tor the importer to show and prove before the authorities concerned that the incidence of duty on the raw material, in respect of which refund is claimed, has not been passed on by the importer to anybody else.