Provisional assessment adjustment allows excess duty to offset short duty, but refund relief remains subject to unjust enrichment.

Where provisional assessments disclose excess duty on some Bills of Entry and short duty on others, the proper officer may consider adjusting the excess against the demand at finalisation, particularly where a refund claim for the excess duty has also been filed in time. Such adjustment is not automatic, because the refund-linked component remains subject to scrutiny under the doctrine of unjust enrichment. The adjudicating authority must recalculate the duty liability after the adjustment exercise and then determine whether the refund element is barred by unjust enrichment.

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Issues: (i) Whether excess duty paid on some Bills of Entry could be adjusted against short duty demanded on other Bills of Entry at the stage of finalization of provisional assessment; (ii) whether the claim for such adjustment was subject to the bar of unjust enrichment.

Issue (i): Whether excess duty paid on some Bills of Entry could be adjusted against short duty demanded on other Bills of Entry at the stage of finalization of provisional assessment.

Analysis: The imports were assessed provisionally and, on finalization, the records showed both excess payment and short payment across different Bills of Entry. The adjustment claim was treated as maintainable where the assessee had also filed a refund claim for the excess duty. The reasoning followed the view that, in such circumstances, the proper officer could consider set-off of excess duty against the duty demand while finalizing assessment.

Conclusion: The claim for adjustment was held to be entertainable in principle.

Issue (ii): Whether the claim for such adjustment was subject to the bar of unjust enrichment.

Analysis: The adjustment was not treated as automatic. It was held that any refund-linked adjustment had to be examined for unjust enrichment, and the adjudicating authority was required to determine that aspect after giving effect to the adjustment exercise. The matter was therefore sent back for a fresh determination on this question.

Conclusion: The issue of unjust enrichment was held to remain open for determination on remand.

Final Conclusion: The dispute was sent back to the adjudicating authority for recalculation after adjusting excess duty against duty demand and for a decision on unjust enrichment; the Revenue's challenge succeeded to that extent.

Ratio Decidendi: Where provisional assessments disclose both excess and short duty and a refund claim for the excess duty is made in time, adjustment may be considered at finalization of assessment, but the refund component remains subject to the doctrine of unjust enrichment.

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