Refund limitation and unjust enrichment: price variation clauses do not by themselves create provisional assessment, but price reductions may defeat enrichment.

A refund claim is subject to the one-year limitation under Section 11B unless the assessee proves a valid provisional assessment under Rule 9B; a contractual price variation clause by itself does not make the assessment provisional. On the facts, no written request or provisional assessment procedure was shown, so the portion of the claim relating to duty paid beyond the limitation period was time-barred. The bar of unjust enrichment did not apply because the contract price was later reduced and the buyer's payments were correspondingly adjusted, indicating that the duty incidence had not been passed on in full.

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Issues: (i) Whether the refund claim for the period July 1999 to January 2000 was barred by limitation under Section 11B of the Central Excise Act, 1944, and whether the assessment could be treated as provisional under Rule 9B of the Central Excise Rules, 1944. (ii) Whether the refund was hit by the bar of unjust enrichment.

Issue (i): Whether the refund claim for the period July 1999 to January 2000 was barred by limitation under Section 11B of the Central Excise Act, 1944, and whether the assessment could be treated as provisional under Rule 9B of the Central Excise Rules, 1944.

Analysis: The refund claim was initially filed on 31-1-2001. The claim related to duty paid on clearances made during July 1999 to October 2000. For treating an assessment as provisional, a written request to the proper officer and consequential provisional assessment procedure under Rule 9B were required. No such request or order was shown. A price variation clause in the contracts by itself did not make the assessment provisional. The relevant date for limitation was therefore the date of payment of duty, and the portion relating to July 1999 to 31-1-2000 fell beyond the one-year period.

Conclusion: The refund claim for July 1999 to 31-1-2000 was time-barred and the assessee's challenge failed on this issue.

Issue (ii): Whether the refund was hit by the bar of unjust enrichment.

Analysis: The contracts contained a price variation clause and the buyers later reduced the payable price downward, deducting the differential amount from payments already made. In these circumstances, the incidence of duty could not be said to have been passed on to the buyers in full. The facts were distinguishable from cases where credit notes were issued subsequently after collection of duty.

Conclusion: The bar of unjust enrichment did not apply and the refund was admissible on this ground.

Final Conclusion: The refund claim succeeded only to the extent it was not defeated by limitation, while the finding rejecting the bar of unjust enrichment was upheld.

Ratio Decidendi: A refund claim is governed by the limitation under Section 11B unless the assessee establishes a valid provisional assessment under Rule 9B, and a contractual price variation clause alone does not make the assessment provisional; unjust enrichment will not apply where the price payable by the buyer is itself reduced and the duty burden is not shown to have been passed on in full.

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