Provisional assessment refund escapes unjust enrichment after finalisation, with refund entitlement upheld for the assessee.

Refund arising on finalisation of provisional assessment under the Customs Act was held to fall within the special provisional-assessment regime, not to be tested as an ordinary refund claim, and the assessee was entitled to the excess amount after final assessment. The Court further held that the doctrine of unjust enrichment and the presumption of passing on duty incidence do not apply to such a refund claim after finalisation; on the facts, the Tribunal had also found that the differential duty was not passed on. The questions of law were answered against the Revenue and the refund entitlement was upheld.

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Issues: (i) Whether refund arising from finalisation of provisional assessment under the Customs Act, 1962 is governed by the refund provisions and is available without applying the bar of unjust enrichment; (ii) Whether the presumption of passing on the incidence of duty and the doctrine of unjust enrichment apply to a refund claim arising from provisional assessment after final assessment.

Issue (i): Whether refund arising from finalisation of provisional assessment under the Customs Act, 1962 is governed by the refund provisions and is available without applying the bar of unjust enrichment.

Analysis: The assessment was provisional and the excess amount became refundable only after finalisation of the assessment. The Court relied on the settled position that adjustment of provisional duty on final assessment stands on a distinct footing and that refund consequential to such finalisation is not to be tested as an ordinary independent refund claim in the same manner as other refund applications.

Conclusion: The refund arising from finalisation of provisional assessment was held to be admissible in favour of the assessee.

Issue (ii): Whether the presumption of passing on the incidence of duty and the doctrine of unjust enrichment apply to a refund claim arising from provisional assessment after final assessment.

Analysis: The Court followed the later Supreme Court pronouncement that the doctrine of unjust enrichment does not apply to provisional assessment even after finalisation of the proceedings. On the facts, the Tribunal had also recorded that the assessee could not have passed on the differential duty, and the statutory presumption was found not to arise against the assessee in the circumstances of the case.

Conclusion: The bar of unjust enrichment and the presumption of passing on duty incidence were held inapplicable, and the issue was decided in favour of the assessee.

Final Conclusion: The questions of law were answered against the Revenue, and the assessee's entitlement to refund was upheld, resulting in dismissal of the appeal.

Ratio Decidendi: Refund arising on finalisation of provisional assessment is governed by the special regime applicable to provisional assessment, and the doctrine of unjust enrichment does not bar such refund after final assessment.

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