Provisional assessment remains open for all valuation issues until finalisation, and pre-unjust enrichment refunds are not barred.

A provisional assessment remains provisional for all relevant valuation and duty issues until finalisation, so there is no basis to confine that status to a single component of assessable value. Refunds arising from finalisation of provisional assessments for periods before the introduction of unjust enrichment are not barred by that doctrine, and duty paid during the provisional period must be included in the refundable amount. The valuation position was sustained, while the refund claim succeeded on unjust enrichment and computation.

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Issues: (i) Whether a provisional assessment can be treated as provisional only for the limited purpose of post-manufacturing expenses or whether it remains provisional for all purposes until finalisation; (ii) Whether the bar of unjust enrichment applies to refunds arising from finalisation of provisional assessments for the period prior to introduction of unjust enrichment, and whether ad hoc duty payments made during the provisional period must be included in the refundable amount.

Issue (i): Whether a provisional assessment can be treated as provisional only for the limited purpose of post-manufacturing expenses or whether it remains provisional for all purposes until finalisation.

Analysis: The valuation of job-worked goods was governed by the principles laid down for such manufacture, and the assessment had remained provisional. A provisional assessment is provisional for all purposes, and all issues relevant to valuation and duty can be decided at the stage of finalisation. There is no basis in the Central Excise framework for confining provisionality to only one component of the assessable value.

Conclusion: The assessment had to be treated as provisional for all purposes, and finalisation on that basis was upheld.

Issue (ii): Whether the bar of unjust enrichment applies to refunds arising from finalisation of provisional assessments for the period prior to introduction of unjust enrichment, and whether ad hoc duty payments made during the provisional period must be included in the refundable amount.

Analysis: The concept of unjust enrichment was introduced into the refund provision with effect from 01.08.1998. The clear rule applied was that refunds arising from finalisation of provisional assessments for periods prior to that introduction are not hit by unjust enrichment. Amounts paid during the provisional period before finalisation are part of the duty paid and must be considered while computing the refund.

Conclusion: The refund was not barred by unjust enrichment, and the additional amount paid during the provisional period had to be taken into account.

Final Conclusion: The valuation aspect was sustained, but the assessee succeeded on unjust enrichment and refund computation, resulting in rejection of the Revenue's challenge and allowance of the cross-objection on the refund issue.

Ratio Decidendi: A provisional assessment remains open for all relevant purposes until finalisation, and refunds arising from finalisation for periods prior to the introduction of unjust enrichment are not defeated by that doctrine; amounts paid during the provisional period must be included in the refund computation.

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