Refund from finalised provisional customs assessment escapes ordinary limitation and unjust enrichment bars under the applicable refund framework.

Refund arising directly from finalisation of a provisional customs assessment is not treated as an independent refund claim for the ordinary limitation and unjust enrichment bars applicable to standalone applications. Applying Mafatlal Industries, the Tribunal held that once the Department finalised the provisional assessment, the refund accrued as a consequence of that finalisation and was therefore not hit by Section 27 limitation in the same manner as a separate refund claim. It further held that the doctrine of unjust enrichment did not bar the refund in this context. The assessee was entitled to the refund.

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Issues: Whether a refund claim arising from finalisation of a provisional customs assessment is governed by the limitation under Section 27 of the Customs Act, 1962, and whether the doctrine of unjust enrichment applies to such refund.

Analysis: The assessment was provisional and was later finalised by the Department, so the refund claim arose only as a consequence of such finalisation. The Tribunal applied the principle laid down in the Supreme Court decision in Mafatlal Industries, under which recoveries or refunds arising from adjustment on final assessment are not governed by the ordinary refund limitation provisions in the same manner as independent refund claims. The Tribunal also followed its earlier decisions holding that, where refund flows directly from finalisation of assessment, the bar of unjust enrichment is not attracted in the same way as in a independent refund proceeding.

Conclusion: The refund claim was not hit by limitation and was not barred by unjust enrichment; the assessee was entitled to the refund.

Ratio Decidendi: A refund arising directly from finalisation of a provisional assessment is not to be treated as an independent refund claim for the ordinary limitation and unjust enrichment bars applicable to standalone refund applications.

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