Duty paid under protest and provisional assessment defeat refund limitation, but unjust enrichment must still be examined before refund

Where duty was paid under valid protest and the assessment remained provisional, the majority held that the six-month limitation under Section 11B did not bar the refund claim, so the limitation objection failed. However, refund could not be granted finally without examining whether the duty burden had been passed on, and the matter was remanded to the original authority for inquiry into unjust enrichment with opportunity to adduce evidence. The dissent took the view that the protest related only to valuation, applied Section 11B, and would have rejected the claim.

---

---

Issues: (i) whether the refund claim was barred by limitation in view of the assessment being provisional and the duty having been paid under protest; (ii) whether the question of unjust enrichment required examination before grant of refund.

Issue (i): whether the refund claim was barred by limitation in view of the assessment being provisional and the duty having been paid under protest.

Analysis: The assessee had raised a protest under Rule 233B and had also pleaded that the relevant assessments were provisional under Rule 9B. The majority accepted that the protest need not be confined to the precise grounds characterised by the department, and once the payment was under valid protest and the assessment remained provisional, the six-month limitation under Section 11B could not be applied to defeat the refund claim.

Conclusion: The refund claim was not barred by limitation.

Issue (ii): whether the question of unjust enrichment required examination before grant of refund.

Analysis: The majority held that even though the limitation objection failed, the refund could not be ordered finally without examining whether the duty burden had been passed on. The matter was therefore sent back to the original authority to consider unjust enrichment and to permit the assessee to adduce evidence on that aspect.

Conclusion: The issue of unjust enrichment was remanded for fresh consideration.

Final Conclusion: The assessee succeeded on the limitation issue, but the refund was not finally granted and the matter was sent back for inquiry into unjust enrichment.

Ratio Decidendi: Where duty is paid under valid protest and the relevant assessment is provisional, the limitation under Section 11B does not operate against a refund claim, but refund remains subject to scrutiny on unjust enrichment.

Dissenting Opinion: Jeet Ram Kait, Member (T), held that the protest related only to valuation and not to the exemption claim, found Section 11B applicable, and rejected the appeal.

---