Refund limitation under protest and unjust enrichment rebuttal turn on pendency of litigation and audited receivables evidence

Refund claims for duty paid under protest during pending litigation are treated as arising when the dispute is finally resolved, so limitation does not run from the payment date. The text also states that unjust enrichment is rebutted where audited balance-sheet and ledger entries, supported by a Chartered Accountant's certificate, show the duty as a receivable from the Government and not as a cost passed on to buyers. On that basis, the refund objection on limitation and unjust enrichment both failed.

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Issues: (i) whether the refund claims were barred by limitation notwithstanding payment under protest pending litigation; (ii) whether the refund was hit by unjust enrichment.

Issue (i): whether the refund claims were barred by limitation notwithstanding payment under protest pending litigation

Analysis: The refund amounts had been paid while the dispute over duty liability was still sub judice. The Court applied the principle that where duty is paid under protest during appellate or court proceedings, the limitation period for refund does not run from the date of payment but from the date the dispute is finally resolved. It relied on the settled position that the pendency of the lis keeps the protest alive and that the statutory limitation bar under refund law does not apply to such payments.

Conclusion: The refund claims were held to be within limitation and the objection of limitation failed against the assessee.

Issue (ii): whether the refund was hit by unjust enrichment

Analysis: The Court accepted the factual finding that the amounts were reflected in the balance sheet and ledger accounts as receivables from the Government, supported by the Chartered Accountant's certificate and other audited records. On that material, it held that the duty burden had not been passed on to buyers and that the assessee had discharged the burden of rebutting the presumption of unjust enrichment.

Conclusion: The refund was held not to be barred by unjust enrichment and this objection also failed against the revenue.

Final Conclusion: The appellate authority's order granting refund relief was sustained in full, and the revenue appeal was dismissed.

Ratio Decidendi: Where duty is paid under protest during the pendency of litigation, refund limitation runs from the final resolution of the dispute, and refund is allowable if the assessee proves that the duty incidence was not passed on to customers.

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