Unjust enrichment does not bar refund of pre-assessment deposits where the taxpayer proves the duty burden was not passed on.

Refunds arising from amounts deposited before final assessment were treated as distinct from duty paid pursuant to an assessment, so the statutory unjust enrichment bar did not apply in the same manner and the refund was not required to be credited to the Consumer Welfare Fund. On the facts, the assessee also proved that the duty incidence had not been passed on, relying on balance-sheet entries, annual report, journal entries and a chartered accountant's certificate showing the sums as recoverable from the Government. The refund claim was therefore allowed in full and the credit direction was set aside.

---

---

Issues: (i) Whether refund arising from provisional assessment under the Customs Act was barred by the doctrine of unjust enrichment and liable to be credited to the Consumer Welfare Fund. (ii) Whether the assessee had shown, on the facts, that the duty burden had not been passed on to its customers.

Issue (i): Whether refund arising from provisional assessment under the Customs Act was barred by the doctrine of unjust enrichment and liable to be credited to the Consumer Welfare Fund.

Analysis: The refund claim arose after finalisation of assessment following provisional clearance of imports. The applicable principle was drawn from the Supreme Court's exposition that refunds flowing from adjustments made on final assessment stand on a different footing from refund claims attracting the ordinary unjust enrichment bar. The Tribunal treated the Customs refund provision as parallel in principle to the excise provisions considered in the governing precedent and held that the statutory bar on refund of duty paid pursuant to an assessment did not govern a deposit made before assessment in the present case.

Conclusion: The refund could not be denied on the ground of unjust enrichment and was not required to be credited to the Consumer Welfare Fund.

Issue (ii): Whether the assessee had shown, on the facts, that the duty burden had not been passed on to its customers.

Analysis: The balance-sheet entries, annual report, journal entries and chartered accountant's certificate supported the assessee's case that the provisional deposits were shown as recoverable from the Government and were not recovered from buyers as customs duty or otherwise. The Tribunal also found that the imported components were not shown to have been consumed in the manufacture of the final products in a manner inconsistent with the assessee's stand.

Conclusion: The assessee established that the incidence had not been passed on.

Final Conclusion: The refund claim was held allowable in full and the order directing credit to the Consumer Welfare Fund was set aside with consequential relief.

Ratio Decidendi: Refunds arising from amounts deposited prior to final assessment are not governed by the unjust enrichment bar applicable to duty paid pursuant to an assessment, and such refund is allowable where the assessee substantiates that the burden was not passed on.

---