Protest against duty may be inferred from correspondence and conduct, keeping refund claims alive and subject to unjust enrichment review.

Before a formal protest procedure was introduced, a protest against duty could be inferred from contemporaneous letters and surrounding conduct where the assessee asserted exemption and stated that payment was made only under departmental insistence. On that basis, the duty payments were treated as made under protest, so the refund claim was not barred by limitation on that ground. The refund claim then had to be examined under the amended refund regime, where the passing on of duty to customers and the doctrine of unjust enrichment were relevant. The matter was therefore remitted for fresh decision on merits, including the unjust enrichment issue.

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Issues: (i) whether the assessee's letters and related conduct constituted payment of duty under protest for the purpose of escaping the bar of limitation on refund; (ii) whether the refund claim, if otherwise maintainable, had to be examined on merits with reference to the doctrine of unjust enrichment under the amended refund provision.

Issue (i): whether the assessee's letters and related conduct constituted payment of duty under protest for the purpose of escaping the bar of limitation on refund.

Analysis: The assessee had written to the department asserting entitlement to the exemption notification, filed a revised classification list, and stated that duty was being paid only because of departmental insistence and to avoid official displeasure. The letters were assessed in the light of the principle that, before the introduction of the prescribed protest procedure, a protest could be gathered from the substance of the communication and surrounding conduct. The earlier correspondence and the absence of a statutory protest form at the relevant time supported the view that the payments were not voluntary in the ordinary sense.

Conclusion: The payments were treated as having been made under protest, and the refund claim was not defeated on that ground.

Issue (ii): whether the refund claim, if otherwise maintainable, had to be examined on merits with reference to the doctrine of unjust enrichment under the amended refund provision.

Analysis: The refund question was required to be decided under the amended refund regime then in force, under which the incidence of duty passing to the customer becomes material. Since the claim had not been finally examined on merits by the original authority, the proper course was to remit the matter for a fresh decision while keeping the statutory bar relating to passing on of duty in view.

Conclusion: The matter was remitted to the Assistant Collector to decide the refund claim on merits, including the unjust enrichment aspect.

Final Conclusion: The assessee succeeded on the question of protest, but the refund entitlement was left for fresh adjudication under the amended statutory refund framework.

Ratio Decidendi: Before the introduction of a formal protest procedure, a protest against duty may be inferred from the substance of the assessee's contemporaneous correspondence and conduct, and a refund claim must then be examined on its merits under the governing refund provision including the bar of unjust enrichment.

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