Refund of extra duty deposit during customs investigation held outside limitation and unjust enrichment restrictions.

An extra duty deposit made during a customs investigation or provisional assessment was treated as not having the character of duty for refund purposes. On that basis, the refund claim was held not to be barred by limitation and not defeated by unjust enrichment. The disputed amounts were therefore directed to be refunded, including the portion earlier rejected as time-barred and the portion credited to the Consumer Welfare Fund, because the deposit was not subject to the usual refund restrictions applicable to duty.

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Issues: Whether refund of extra duty deposit made during Special Valuation Branch investigation was payable without being defeated by limitation or unjust enrichment.

Analysis: The amount in question was an extra duty deposit made in the course of provisional assessment and Special Valuation Branch enquiry. Such a deposit was held not to partake the character of tax for the purpose of refund restrictions. Accordingly, the doctrines of limitation and unjust enrichment were held inapplicable to the refund claim in the facts of the case.

Conclusion: The refund was directed to be granted for the amount rejected as time-barred and for the amount credited to the Consumer Welfare Fund on the ground of unjust enrichment, in favour of the assessee.

Final Conclusion: The appeal succeeded to the extent of the disputed refund amounts and the lower authority's order was reversed to that extent.

Ratio Decidendi: An extra duty deposit made during customs investigation or provisional assessment is refundable without being subjected to limitation or unjust enrichment when it is not in the nature of duty.

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