Provisional assessment refunds: remand-based de novo finalisation extended limitation and avoided unjust enrichment for pre-amendment claims.

Where an order finalising provisional assessment is set aside in remand and the matter is sent back for de novo adjudication, the earlier finalisation is vacated and the duty paid in the interregnum continues to relate to provisional assessment until the later finalisation; on that basis, the refund claim filed after the later finalisation was within time. The text also states that unjust enrichment did not bar the refund because the assessee produced invoices and payment records showing no passing on of duty, and because refunds relating to pre-amendment provisional assessments were outside the amended Section 11B bar. The amount deposited during investigation was treated as an advance deposit for provisional release and was likewise held refundable.

---

---

Issues: (i) Whether the refund claims arising from duty paid between 01.04.1996 and 12.05.1999 were barred by limitation on the footing that provisional assessment stood finalised on 18.03.1996; (ii) whether the refund claims were hit by unjust enrichment, including the refund of amounts deposited during investigation.

Issue (i): Whether the refund claims arising from duty paid between 01.04.1996 and 12.05.1999 were barred by limitation on the footing that provisional assessment stood finalised on 18.03.1996.

Analysis: The earlier order finalising provisional assessment had been set aside in remand proceedings, and the matter was sent back for de novo adjudication. That remand vacated the earlier finalisation and restored the parties to the pre-finalisation position. On that basis, the duty paid during the relevant period remained referable to provisional assessment, and the relevant finalisation occurred only on 13.07.1999. The refund application filed on 04.11.1999 was therefore within time.

Conclusion: The refund claims were not barred by limitation and the finding against the assessee on this ground was unsustainable.

Issue (ii): Whether the refund claims were hit by unjust enrichment, including the refund of amounts deposited during investigation.

Analysis: The assessee produced invoices and payment records showing that the duty incidence had not been passed on. Independently, the refund related to a period of provisional assessment prior to the amendment that brought such refunds within the ambit of Section 11B. The amount paid during investigation was treated as an advance deposit and payment for provisional release, so the bar of unjust enrichment did not apply to that refund either.

Conclusion: The refund claims were not hit by unjust enrichment, including the claim for the amount deposited during investigation.

Final Conclusion: The refund claims were held maintainable on both limitation and unjust enrichment, and the assessee was held entitled to the consequential refund reliefs.

Ratio Decidendi: Where an order finalising provisional assessment is set aside in remand and de novo finalisation occurs later, duty paid in the interregnum continues to partake of provisional assessment for refund purposes; for pre-amendment provisional assessments, the refund is not controlled by the unjust enrichment bar under Section 11B.

---