2012 (9) TMI 272 - AT - Service Tax

Refund claims unjust enrichment service tax paid under protest Held that - Incidence of the said service tax had not been passed on by them to any other person and it was not recovered from the clients - service tax amount was paid subsequently and under protest - appellant is following cash method of accounting and the Chartered Accountant s certificate specifically states that incidence has not been passed on - appellants have been able to show that there is no unjust-enrichment - appeals are allowed

Summary

Issues:
Refund claim rejection based on unjust-enrichment.

Analysis:
The Appellate Tribunal considered two orders rejecting refund claims by the appellants, noting the same issue and period involved. The appellant received payments in April 2006 for services, made a payment in October 2006 due to a dispute on eligibility for exemption in 2005-06, and later filed a refund claim for amounts paid in 2006-07. The claim was denied citing unjust-enrichment. The appellant's Chartered Accountant argued that the appellant follows cash method of accounting, paid under protest, and did not collect the amount from clients. The lower authorities did not consider the Chartered Accountant's certificate, claiming it insufficient to prove no unjust-enrichment. The Tribunal found that the appellant acted in compliance with the law by paying under protest in 2005-06 and not passing on the tax incidence. The absence of audit in the accounts was explained, and the Tribunal accepted the Chartered Accountant's certificate as evidence. Considering the circumstances, the Tribunal held that the appellants demonstrated no unjust-enrichment, allowing both appeals with consequential relief.

This judgment primarily revolves around the rejection of a refund claim due to the concept of unjust-enrichment. The appellant's actions, following the cash method of accounting, paying under protest, and not passing on the tax burden, were crucial in establishing their case against unjust-enrichment. The Chartered Accountant's certificate played a significant role in proving that the tax amount was not collected from clients, strengthening the appellant's argument. The Tribunal emphasized the importance of following the law and ensuring proper implementation, ultimately leading to the decision in favor of the appellants based on the evidence presented. The judgment highlights the significance of proper documentation and adherence to accounting practices in tax-related disputes to establish the absence of unjust-enrichment and secure a favorable outcome.