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Issues involved:
The issues involved in the judgment are the refund of service tax paid under protest, applicability of Notification No. 43/97 dated 5-11-1997, unjust enrichment, and the legality of the tax levied on the appellant. Refund of Service Tax Paid Under Protest: The appellant deposited service tax amounting to &8377; 38,610/- under protest on 8-11-2002. The appellant claimed that the tax was not leviable as per the amendment to Notification No. 43/97 dated 5-11-1997, which exempted small scale industries from service tax. The appellant made a refund application on 4-6-04, which was acknowledged by the Department on the same day. The rejection of the refund claim on 11-10-2004 was deemed baseless as the refund claim was filed within the permissible time frame. The Tribunal held that the tax deposited under protest was refundable, and the authorities should examine the refund application for unjust enrichment before passing appropriate orders. Applicability of Notification No. 43/97 dated 5-11-1997: The Notification exempted goods transport operators from service tax for services provided to small scale industries registered with the State Govt. The order of adjudication passed on 21-5-2004 concluded that the appellant, being an SSI unit registered with the State Govt., was exempt from payment of service tax. The Tribunal emphasized that the tax paid by the appellant was not leviable as per the rescinded Notifications and should be considered for refund. Unjust Enrichment: The Tribunal highlighted the doctrine of unjust enrichment, stating that even if tax is paid under protest, it must meet the tests of unjust enrichment. The authorities were directed to scrutinize the refund application dated 4-6-2004 for unjust enrichment before making a decision. The Tribunal emphasized that the appellant paid the tax as a receiver of service, not as a service provider, and the tax paid for the period 16-11-97 to 1-6-98 was neither leviable nor realizable from the appellant. Legality of Tax Levied on the Appellant: The Tribunal referenced the Finance Act 1994, Section 66, and Rule 6(i) of the Service Tax Rules, 1994, which required service tax to be collectible from the receiver of taxable service. Citing the Supreme Court judgment in Laghu Udyog Bharati v. Union of India, the Tribunal held that the tax paid by customers of goods transport operators should be refunded. The Tribunal emphasized that the tax deposited by the appellant was refundable as it was not legally levied on the appellant.
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