CESTAT Chennai Allows Hindustan Unilever Excise Refund, Holds CA Certificate Rebuts Unjust Enrichment

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai, has allowed Hindustan Unilever Ltd.'s refund claims arising from the finalisation of provisional assessments.

It found that the company had established, through a Chartered Accountant's certificate, that the excess excise duty had not been passed on to customers. The tribunal held that the refund claims were therefore not barred by the doctrine of unjust enrichment.

A coram of Judicial Member P. Dinesha and Technical Member M. Ajit Kumar held that the authorities ignored a material document forming part of the record while rejecting the refund claims.

"The Authority has literally ignored the said certificate although the same is forming part of the record, which is not expected of a quasi-judicial Authority. When a document is placed before him, the officer has to consider its applicability, relevancy etc. before rejecting or accepting the same," the tribunal observed.

Hindustan Unilever manufactures products including shampoo, talcum powder, Ponds Moisturizing Cold Cream and Vaseline Pure Petroleum Jelly. It filed the refund claims after the finalisation of its provisional assessments resulted in excess payment of central excise duty.

The adjudicating authority rejected the refund claims on the ground of unjust enrichment. The Commissioner (Appeals) upheld that decision. The company then challenged the appellate order before the tribunal.

The tribunal noted that the officer who finalised the provisional assessments had already examined the documents produced by the company. Those documents included the Chartered Accountant's certificate. After examining the records, the officer concluded that excess duty had been paid.

The tribunal further noted that the Chartered Accountant had certified that the excess duty paid on the clearance of goods had not been recovered from customers through the sale price. The certificate also formed part of the refund applications before the adjudicating authority.

The tribunal observed that if the authorities required any clarification regarding the certificate, they ought to have sought it from the company instead of ignoring the document. It found that the certificate was part of the record but had not been considered.

"When the document is so clear, if at all there was any clarification required, the same could have been sought for from the Appellant... When a document like a Chartered Accountant certificate certifies the fact that no part of duty was being passed on, the certificate has to be given effect to," the tribunal held.

Holding that the Chartered Accountant's certificate established that the incidence of duty had not been passed on, the tribunal ruled that the refund claims were not barred by the bar of unjust enrichment.

It consequently set aside the orders rejecting the refund claims and allowed both appeals..

For Appellant: Advocate M.N. Bharathi,

For Respondent: N. Satyanarayana, Authorized Representative