Voluntary Payment and Estoppel bar refund claims where investigation closure followed payment and no proof of absence of unjust enrichment.

The article addresses recovery and refund of differential customs duty where the importer paid during a DRI inquiry and sought closure. It holds that the payment was voluntary, invoking estoppel by conduct to deny later protest; the 2019 notification amends prior rules and operates prospectively only; collection following the petitioner's payment and request for closure did not require a separate pre-collection show-cause in the factual matrix; a refund claim fails where the claimant cannot prove absence of unjust enrichment. Operative effect: no refund entitlement given voluntary payment, prospective amendment, estoppel, and lack of proof against unjust enrichment.

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Issues: (i) Whether the differential customs duty collected during DRI investigation was paid by the petitioner under protest or voluntarily; (ii) Whether the notification/clarification relied upon by the petitioner operates retrospectively or prospectively; (iii) Whether Notification No.25/2019-Customs dated 06.07.2019 is an amendment and its temporal effect; (iv) Whether collection of differential duty during DRI investigation without issuance of a show cause notice under Section 28 of the Customs Act, 1962 was proper; (v) Whether the petitioner is entitled to refund after requesting closure of the DRI investigation upon payment; (vi) Whether refund under Section 27 is permissible absent proof against unjust enrichment.

Issue (i): Whether the differential customs duty collected during DRI investigation was paid by the petitioner under protest or voluntarily.

Analysis: The petitioner's letter dated 05.03.2019 did not state that the payment was made under protest; the petitioner requested DRI to conclude the investigation and between 05.03.2019 and 03.07.2019 did not raise any dispute. DRI accepted closure under Section 28(2) on receipt of the payment. The Court applied the doctrine of estoppel by conduct to the petitioner's post-closure attempt to treat the payment as under protest.

Conclusion: The payment was made voluntarily and not under protest; it was not a payment under protest in favour of the petitioner.

Issue (ii): Whether the notification/clarification relied upon by the petitioner operates retrospectively or prospectively.

Analysis: The Court contrasted the Finance Bill wording with the Finance Act and examined Notification No.25/2019-Customs. The Finance Act did not adopt the Finance Bill wording as a retrospective clarification; the amendment language and notification indicate prospective operation.

Conclusion: The notification/clarification relied upon by the petitioner is prospective, not retrospective, and does not operate to alter duty for imports made during 2014-2017.

Issue (iii): Whether Notification No.25/2019-Customs dated 06.07.2019 is an amendment to the earlier notification and its effect.

Analysis: The text of Notification No.25/2019-Customs shows it amends Notification No.50/2017-Customs; the amendment language and the statutory exercise of power under Section 25(1) of the Customs Act indicate an amendment made in public interest and prospective effect.

Conclusion: Notification No.25/2019-Customs is an amendment to the earlier notification and is prospective in effect.

Issue (iv): Whether collection of differential duty during DRI investigation without issuance of a show cause notice under Section 28 of the Customs Act, 1962 was proper.

Analysis: The petitioner voluntarily paid the differential duty and requested closure; DRI concluded the investigation under Section 28(2). Given the voluntary payment and the petitioner's request for closure, the Court found no legal necessity to issue a separate show cause notice under Section 28 before collecting the payment in the circumstances of this case.

Conclusion: Collection of the differential duty under these facts was proper and did not require issuance of a show cause notice prior to collection.

Issue (v): Whether the petitioner is entitled to refund after requesting closure of the DRI investigation upon payment.

Analysis: The petitioner's conduct in requesting closure upon payment and acquiescing until DRI's closure letter, followed by later seeking refund, was held to be inconsistent and to attract estoppel by conduct; reopening the matter would undermine finality and the sanctity of investigations.

Conclusion: The petitioner is not entitled to seek refund after requesting and obtaining closure of the investigation upon payment.

Issue (vi): Whether refund under Section 27 is permissible absent proof against unjust enrichment.

Analysis: An application under Section 27 requires evidence that the claimant did not pass on the duty to buyers to avoid unjust enrichment. The petitioner filed an application under Section 27(1)(a) but did not produce evidence to dispel unjust enrichment.

Conclusion: Refund under Section 27 is not permissible because the petitioner failed to prove absence of unjust enrichment.

Final Conclusion: The cumulative effect of the findings is that the petitioner's claim for refund fails on multiple grounds - voluntary payment, prospective operation of the amendment, propriety of collection without a separate show cause in the factual matrix, estoppel by conduct, and lack of proof against unjust enrichment - and the writ petition is without merit.

Ratio Decidendi: Where an importer voluntarily pays differential customs duty and requests closure of an investigation, then allows the investigation to be closed without contemporaneously protesting the payment, the importer is estopped from later treating the payment as made under protest and seeking refund under Section 27 absent timely protest and satisfactory evidence negating unjust enrichment; an amendment notification that operates prospectively cannot be applied retrospectively to alter liability for past imports.

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