Unjust enrichment bars refund on finalised provisional assessment when duty burden is passed on to the buyer

Refund arising from finalisation of provisional assessment was held subject to the amended provisional assessment regime where finalisation occurred after the 25-6-1999 amendment. CESTAT Chennai ruled that the earlier Supreme Court decision on refunds finalised before that amendment was inapplicable. Because the duty burden had been passed on to the buyer, the refund claim attracted the doctrine of unjust enrichment and was not admissible. The impugned order granting refund was therefore set aside and the Revenue's appeal succeeded.

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Issues: Whether refund arising from finalisation of provisional assessment was barred by the doctrine of unjust enrichment in view of the amendment to the provisional assessment provisions.

Analysis: The duty was initially paid on provisional assessment and the assessments were finalised only after the amendment of 25-6-1999. The Court held that the refund claim had to be examined in the light of the amended provisional assessment provision, and the earlier Supreme Court ruling dealing with refunds finalised before the amendment did not apply. As the duty burden had been passed on to the buyer, the claim attracted the bar of unjust enrichment.

Conclusion: The refund was not admissible and the Revenue succeeded on the issue.

Final Conclusion: The impugned order granting refund was set aside and the Revenue's appeal was allowed.

Ratio Decidendi: Refunds consequent upon finalisation of provisional assessment are subject to unjust enrichment where finalisation occurs after the amendment bringing such refunds within its scope, and the burden of duty having been passed on disentitles the claimant to refund.

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