HINDUSTAN LEVER LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) The issue involved in this appeal filed by Hindustan Lever Ltd. is whether the refund of Central Excise duty claimed by them is hit by the principle of unjust enrichment.

(2.) Shri C.S. Lodha, learned Advocate, submitted that the Appellants manufacture Soap, Detergents, Glycerin, etc.; that they have been claiming the deduction of various post -clearance expenses from the assessable value under Section 4 of the Central Excise Act; that the clearances of excisable goods were allowed to them on the basis of provisional assessment under Rule 9B of the Central Excise Rules, 1944; that after the judgment of the Supreme Court in the case of Govt. of India v. MRF -1995 (77) E.L.T. 433, the Asstt. Commissioner of Central Excise under Order dated 31 -3 -97 allowed the deductions on account of (a) taxes borne by the Appellants, and (b) interest costs on receivables; that however, the Asstt. Commissioner disallowed a number of expenses including freight charges on finished product for movement of goods post -removal from the factory gate; that they filed an appeal before the Commissioner (Appeals) in which they surrendered all the abatements except freight charges on movements of finished goods post -removal from the factory gate; that the Commissioner (Appeals) vide Order -in -Appeal dated 16 -7 -98 allowed conditionally subject to verification of the claim; that the Asstt. Commissioner verified the facts and deductions towards weight of finished goods vide Orders dated 29 -3 -2000; that the assessment were finalised for the financial years, 1988 -89, 1989 -90 and 1990 -91 vide order dated 5 -5 -97 whereas the provisional assessment was finalised for the financial year, 1995 -96 and 1996 -97 on 29 -3 -2000; that consequent to the finalisation of the assessment they filed 5 refund claims for refund of duty paid provisionally on 30 -8 -2000; that the Day. Commissioner under Order -in -Original No. 5/2001, dated 13 -12 -2001 rejected their claim on the ground that they had failed to establish that the incidence of duty of Excise in relation to refund claim so filed had not been passed on to any other person; that on appeal the Commissioner (Appeals) under the impugned Order has also rejected their appeal holding that they had failed to produce any evidence which can prove that the incidence of duty was not passed on to the consumer during the disputed period and that they had absorbed the burden.

(3.) The learned Advocate further submitted that the Asstt. Collector had finalised the provisional assessment for the financial year from 1974 -75 to 1993 -94 by Orders dated 5 -5 -97; that the refund claims in respect of financial years 1974 -75 to 1987 -88 and 1991 -92 to 1993 -94 had been decided by the Appellate Tribunal vide Final Order No. A -106/2003 -NB(C), dated 27 -2 -2003 as reported in 2003 (154) E.L.T. 482 (T). The Tribunal in the said decision relying upon the decision of the Supreme Court in the case of Mafatlal Industries Ltd. v. UOI -1997 (89) E.L.T. 247 (S.C.) and the decision in the case of CCE v. Hazi A.M. Abdul Rahiman - 2001 (133) E.L.T. 23 (Madras) has held that the assessment stand finalised by Order dated 5 -5 -97 and refund claims having been filed on 10 -7 -97 i.e. before the amendment of Rule 9B(5) of Central Excise Rules, 1944 the principle of unjust enrichment is not applicable; that the appeal filed by the Revenue has been dismissed by the Supreme Court as reported in 2003 (158) E.L.T. A180 relying upon the decision in the case of CCE v. T.V.S. Suzuki Ltd. - 2003 (156) E.L.T. 161 (S.C.). The learned Advocate, therefore, contended that as the Tribunal has already held for number of financial years the principle of unjust enrichment is not applicable and the said decision has been confirmed by the Supreme Court, it is not open to the Department to hold now that the principle of unjust enrichment is applicable to the refund claims arising on finalisation of assessment for the remaining financial years. The learned Advocate also relied upon the decision of the Tribunal in the case of CCE, Trichi v. Abdul Rahiman Rowther and Co. - 2000 (39) RLT 1120 (CEGAT) wherein it has been held that the bar of unjust enrichment does not apply to the refund arising from the provisional assessment prior to June, 1999. Reliance has also been placed on the decision in the case of CCE, Meerut -1 v. Modi Paints and Varnish Works - 2000 (38) RLT 302 (CEGAT).