Provisional assessment refunds and unjust enrichment: duty borne by assessee means refund is not barred under the special scheme.

Refund arising from finalisation of provisional assessment under the Central Excise Rules was treated as part of a special adjustment scheme, with Rule 7(6) directing refund in accordance with Section 11B(2). The Court held that this mechanism is materially distinct from an ordinary refund claim and that the doctrine of unjust enrichment would not bar the refund where the factual findings showed the duty incidence was borne by the assessee. The Revenue had not displaced those findings, and its acceptance of similar refunds for other years supported the same result. The refund orders were therefore sustained in favour of the assessee.

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Issues: Whether the doctrine of unjust enrichment applies to refund arising from finalisation of provisional assessment under the Central Excise Rules, and whether such refund is governed by the procedure under Section 11B of the Central Excise Act, 1944.

Analysis: Rule 7(6) governing provisional assessment provides that duty provisionally assessed is to be adjusted against duty finally assessed, and any refund is to be made in accordance with the procedure under Section 11B(2). The Court treated the provisional assessment mechanism as materially distinct from a normal refund claim. It relied on the earlier view that provisional assessment operates as a self-contained scheme, while distinguishing the case where the assessee had originally passed on the duty burden. The factual findings of the authorities below showed that the incidence of duty had been borne by the assessee and that the Revenue had not shown any basis to disturb those findings. The Court also noted that the Revenue had accepted similar refunds for other assessment years, and that the material on record did not justify invoking unjust enrichment against the assessee in these provisional assessment cases.

Conclusion: The doctrine of unjust enrichment was held not to defeat the assessee's refund arising from finalisation of provisional assessment, and the issue was answered in favour of the assessee and against the Revenue.

Final Conclusion: The appeal failed and the orders granting refund were sustained.

Ratio Decidendi: Refund arising on finalisation of provisional assessment is governed by the special adjustment mechanism in the provisional assessment rules, and where the burden of duty is found to have been borne by the assessee, unjust enrichment does not bar the refund.

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