2014 (9) TMI 976 - AT - Service Tax

Denial of refund claim - Management Consultancy Service - Unjust enrichment - Held that - Certificate issued by the CA does not reflect true and correct picture on basis of which documents Commissioner had come to the conclusion that the bar of unjust enrichment has been passed. We do not agree with the contention of the learned Counsel that the provisions of Section 11B of the Central Excise Act 1944 are not applicable to the facts of this case as it is a pre-deposit as they have paid the Service Tax under the Head of Management Consultancy Service and thereafter sought change of classification. As Service Tax has been paid by the respondent during the course of investigation therefore test of bar of unjust enrichment is required to be passed on by the respondent. - Matter remanded back - Decided in favour of Revenue.

Summary

Issues:
Appeal against refund claim sanctioning, unjust enrichment examination.

Analysis:
The case involved an appeal by the Revenue against an order sanctioning a refund claim of Rs. 40 lakhs with interest to the respondent by the learned Commissioner (Appeals). The respondent had initially paid the amount under the category of Management Consultancy Service but later sought a change to Legal Consultancy Service. The Revenue contended that the issue of unjust enrichment was not examined while sanctioning the refund claim. The Revenue argued that the amount paid should be considered a pre-deposit and unjust enrichment should be applied. The respondent, on the other hand, claimed that the payment was made on persuasion during investigation and hence unjust enrichment did not apply. The Tribunal noted that it was unclear whether the respondent had recovered the Service Tax from clients. The Tribunal examined a certificate produced by the respondent's Counsel, which they found did not provide a clear picture regarding unjust enrichment. The Tribunal disagreed with the respondent's argument that Section 11B of the Central Excise Act did not apply, as the payment was made under Management Consultancy Service before seeking a change of classification. The Tribunal remanded the matter to the adjudicating authority to examine the issue of unjust enrichment further. The respondent was directed to produce necessary documents to support their claim, and the adjudicating authority was instructed to decide the issue within one month of document submission. The appeal was disposed of by way of remand.