2010 (10) TMI 404 - AT - Service Tax

Refund claim -Cenvat credit of Service tax - Import of services - Record reveals that the period under dispute was 2003-04 and 2004-05 - Learned Commissioner (Appeals) has brought out that service tax was payable on the part of consultancy service w.e.f. 1-1-2005 and that particular fact made the appellant handicapped to claim Cenvat credit -No dispute that certain amount was deposited by the appellant who had subsequently availed Cenvat credit on the same amount - Pleading of the appellant was also that deposit was also made under protest - It appears that pleading of the appellant did not appeal to the learned appellate authority for which he denied relief - But the law as that was existing during the year 2003-04 & 2004-05 appears to have not brought foreign engineering consultancy service into the fold of service tax - Therefore, remand to the learned Commissioner (Appeals) to re-examine the matter after consideration the list bar of unjust enrichment.

Summary

Issues:
1. Claim of refund of amount paid under protest for Engineering Consultancy service.
2. Applicability of Cenvat credit for the disputed period.
3. Denial of relief by the Appellate Authority.
4. Immunity from taxation for foreign engineering consultancy service.
5. Doctrine of unjust enrichment.
6. Remand of the appeal to the Commissioner (Appeals).

Analysis:
The appellant argued that Engineering Consultancy service availed from a foreign service provider during the disputed period was not taxable until 1-1-2005, while their adjudication covered the years 2002-03 and 2004-05. The Commissioner (Appeals) initially allowed a refund of the amount paid under protest for Cenvat credit, but this decision was later reversed without proper justification. The Appellate Tribunal noted that the judgment of the Apex Court and decisions from the Bombay High Court and Tribunal were not considered by the Commissioner (Appeals), leading to the denial of Cenvat credit.

It was established that the appellant had deposited a certain amount under protest and subsequently utilized Cenvat credit on the same amount. The Tribunal emphasized the need to re-examine the issue of immunity from taxation for the material period in light of relevant legal decisions. The doctrine of unjust enrichment was highlighted, along with the requirement to consider the manner of protest to avoid unjust enrichment, as per the law laid down by the Apex Court in a previous case.

Consequently, the Tribunal set aside the impugned order and remanded the appeal to the Commissioner (Appeals) for a re-examination of the matter. The Commissioner (Appeals) was directed to consider the guidelines provided, including the aspects of immunity from tax, unjust enrichment, and proper application of the law. The Tribunal dispensed with the pre-deposit requirement and disposed of the appeal, emphasizing the need for a thorough re-evaluation by the Commissioner (Appeals) before passing an appropriate order.