Provisional assessment refund cannot be denied by later unjust enrichment amendment once refund entitlement has crystallised.

Refund arising from finalisation of provisional assessment could not be defeated by retrospectively applying the later unjust enrichment bar inserted in Rule 9-B(5) of the Central Excise Rules, 1944, where the competent authority had already ordered refund under the prevailing statutory framework. The Court held that duty levy, collection and refund in such circumstances had to be governed by the law applicable when the provisional assessment was finalised, not by a later amendment introduced after the refund entitlement had crystallised. The refund was therefore held payable and the refusal to refund was set aside.

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Issues: (i) Whether the doctrine of unjust enrichment inserted in Rule 9-B(5) of the Central Excise Rules, 1944 by Notification No. 45/99-CE(NT) dated 25.6.1999 could be applied retrospectively to a refund claim arising from transactions of April 1997 to March 1998; (ii) Whether levy, collection and refund of duty under the Central Excise law had to be determined with reference to the law in force at the time of clearance of the goods or at the time of finalisation of provisional assessment.

Issue (i): Whether the doctrine of unjust enrichment inserted in Rule 9-B(5) of the Central Excise Rules, 1944 by Notification No. 45/99-CE(NT) dated 25.6.1999 could be applied retrospectively to a refund claim arising from transactions of April 1997 to March 1998.

Analysis: The refund arose from finalisation of provisional assessment and the competent authority had already directed refund under Section 11-B of the Central Excise Act, 1944. The Court held that once the refund order had been passed on the basis of the existing assessment framework and the assessee had made the requisite declaration, the later amendment introducing the bar of unjust enrichment could not be used to defeat that refund claim retrospectively.

Conclusion: The issue was answered in favour of the assessee and against retrospective application of unjust enrichment.

Issue (ii): Whether levy, collection and refund of duty under the Central Excise law had to be determined with reference to the law in force at the time of clearance of the goods or at the time of finalisation of provisional assessment.

Analysis: The Court treated the refund as consequential to the finalisation of provisional assessment already ordered by the Superintendent. Since the refund was directed by the competent authority and was not challenged, the later proceedings could not reopen the matter on a different understanding of unjust enrichment. The applicable position was the one governing finalisation of the provisional assessment, not a later retrospective restriction.

Conclusion: The issue was answered in favour of the assessee and the refund was held to be payable.

Final Conclusion: The appeals succeeded, the refund was directed to be granted, and the authorities' refusal to refund was set aside.

Ratio Decidendi: A refund arising from finalisation of provisional assessment cannot be denied by retrospectively applying a later inserted unjust enrichment bar where the refund had already been directed by the competent authority under the prevailing statutory framework.

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