Provisional assessment refunds escape unjust enrichment; later refund-rule amendments apply only prospectively.

Refund arising from finalisation of provisional assessment was treated as a re-credit consequent on adjustment of duty, so the doctrine of unjust enrichment did not automatically bar relief. The Tribunal applied the settled position that such claims are distinct from ordinary refund claims and are not defeated merely because duty had been paid earlier under provisional assessment. It also held that the amendment to Rule 9B(5) and the related refund provision operated prospectively, so assessments finalised before the amendment remained governed by the pre-amendment position. The assessee's refund/re-credit claim therefore succeeded.

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Issues: (i) Whether the doctrine of unjust enrichment applies to a refund arising on finalization of provisional assessment. (ii) Whether the amendment to the refund/re-credit regime operates retrospectively or prospectively.

Issue (i): Whether the doctrine of unjust enrichment applies to a refund arising on finalization of provisional assessment.

Analysis: The refund claim arose from finalization of provisional assessment. The settled position applied by the Tribunal was that where duty is initially paid under provisional assessment and the assessment is later finalized, the assessee is entitled to the refundable amount and the bar of unjust enrichment does not automatically apply. The Tribunal followed the earlier view accepted in the relevant Supreme Court and Tribunal decisions and treated the case as one of re-credit consequent upon finalization, not as an ordinary refund claim.

Conclusion: Unjust enrichment did not apply to the refund claim on finalization of provisional assessment, and the assessee was entitled to relief.

Issue (ii): Whether the amendment to the refund/re-credit regime operates retrospectively or prospectively.

Analysis: The Tribunal held that the amendment to Rule 9B(5) and the related refund provision was prospective in operation. Assessments finalized before the amendment date were governed by the pre-amendment legal position, under which the assessee could not be denied refund/re-credit on the footing of unjust enrichment in such provisional assessment cases. The contrary authorities cited by the Revenue were distinguished as not dealing with refunds on finalization of provisional assessment.

Conclusion: The amendment operated prospectively and did not defeat the assessee's claim arising from earlier finalized provisional assessments.

Final Conclusion: The impugned order was unsustainable and the assessee's refund/re-credit claim succeeded with consequential relief.

Ratio Decidendi: Refund arising from finalization of provisional assessment is not hit by unjust enrichment, and a later amendment imposing stricter refund conditions applies only prospectively.

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