Unjust enrichment and provisional assessment refunds: accounting entries alone do not prove duty passed to buyers.

Refund of excess duty arising from finalisation of provisional assessment was examined under the doctrine of unjust enrichment. Mere reflection of the duty in the accounts, or charging it to profits, did not by itself prove that the burden had been passed on to buyers; the earlier view also rested on the factual assumption that transfer from factory to depot amounted to a sale. The doctrine was further held inapplicable retrospectively to refunds for the period before the notification that brought such refunds within its scope. The refund claim was therefore not barred by unjust enrichment.

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Issues: Whether the refund claim arising from finalisation of provisional assessment was barred by unjust enrichment, and whether the doctrine of unjust enrichment applied retrospectively to refunds arising before the relevant notification.

Analysis: The refund related to excess duty paid on goods cleared under provisional assessment. The relevant question was whether the excess duty was passed on to buyers merely because it was reflected in the accounts or charged to profits. The accounting treatment by itself did not establish transfer of the duty burden to a third party. The earlier authorities also proceeded on an incorrect factual assumption by treating the transfer from factory to depot as a sale. The doctrine of unjust enrichment was also held not to apply retrospectively to the refund in question for the period prior to the notification bringing such refunds within its fold.

Conclusion: The refund claim was not hit by unjust enrichment, and the retrospective application of the doctrine was rejected.

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