Provisional assessment refunds are not hit by later unjust enrichment rules, with receivable entries relevant to duty incidence.

Refunds arising from provisional assessment are governed by the law in force when the provisional assessment was made, so a later-inserted unjust enrichment condition under Section 18 of the Customs Act cannot be applied retrospectively. For provisional assessments made before 13.07.2006, the refund claim could not be denied on that ground. An accounting entry showing the amount as receivable from Customs and under loans and advances was treated as relevant evidence that duty incidence had not been passed on, although the refund claim required fresh verification to confirm that the receivable entry covered the present claim. The matter was therefore remanded for reconsideration and a fresh order.

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Issues: Whether refund arising from finalisation of provisional assessment made before the amendment introducing unjust enrichment under Section 18 of the Customs Act, 1962 is liable to be denied on that ground, and whether showing the amount as receivable in the balance sheet establishes that the incidence of duty was not passed on.

Analysis: The provisional assessments were made in 2004 and the final assessment was completed in 2007. The governing legal position is that the law applicable to the provisional assessment period controls the refund consequence. Since the unjust enrichment requirement was introduced in Section 18 only with prospective effect from 13.07.2006, it could not be applied to a provisional assessment completed before that date. The entry of the refund amount under loans and advances as receivable from Customs was treated as evidence that the amount had not been recovered from customers, and the contrary inference drawn by the lower authority was not accepted. However, the refund was required to be verified afresh to confirm that the receivable entry covered the present claim.

Conclusion: The bar of unjust enrichment was held inapplicable to the refund claim, and the matter was remanded to the adjudicating authority for fresh verification and passing of a new order.

Final Conclusion: The assessee succeeded on the legal issue of unjust enrichment, but the refund claim was sent back for reconsideration and verification before final grant.

Ratio Decidendi: In respect of refunds arising from provisional assessment, the law in force on the date of the provisional assessment governs the claim, and a subsequently introduced unjust enrichment condition cannot be applied retrospectively.

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