2012 (11) TMI 924 - HC - Service Tax

Refund - unjust enrichment - service tax wrongly paid under the category of Business Auxiliary Service - contract entered between the appellants and M/s. Alcock Ashdown specifically stipulates that the price is inclusive of all the taxes, levies, etc. - Held that - Once the M/s. Alcock Ashdown (Gujarat) themselves issued certificate that the amount of service tax was not received by the respondent from their customers then there was no question of undue enrichment by the respondent taking the view that the refund was liable to be paid to the present respondents as service tax was not passed on to the buyers/customers - in favour of the assessee

Summary

Issues:
Claim of refund of service tax as manufacture under Central Excise Act, 1944; Unjust enrichment; Appeal against refund transfer to consumer welfare fund; Appeal questioning documents produced for refund; Allegation of tax collection from another party.

Analysis:

1. The respondent, a job worker, sought a refund of service tax under Business Auxiliary Service, claiming their activity amounted to manufacture under Section 2(f) of the Central Excise Act, 1944. The Assistant Commissioner issued a deficiency memo for lack of evidence on unjust enrichment, leading to a show cause notice. The respondent contended they did not pass on the tax burden to anyone.

2. The Assistant Commissioner, while accepting the activity as manufacture, transferred the refund to the consumer welfare fund due to alleged realization of service tax from another party. The Commissioner (Appeals) reversed this decision after examining relevant documents, leading to an appeal by the Revenue to the Tribunal.

3. The Tribunal dismissed the Revenue's appeal, upholding the findings that the respondent did not collect tax from the other party. The Commissioner (Appeals) detailed entries in the respondent's books showing the refund credited to the other party, along with a contract stipulating inclusive pricing and no tax burden transfer.

4. The Commissioner (Appeals) also highlighted a letter from the other party confirming non-receipt of the tax amount and the prohibition on claiming credit for unpaid amounts. The Tribunal and Commissioner (Appeals) found no unjust enrichment, leading to the dismissal of the Revenue's appeal.

5. The High Court upheld the Tribunal and Commissioner (Appeals) decisions, emphasizing the absence of undue enrichment by the respondent. The court concluded that the refund was justified as the tax was not passed on to buyers, dismissing the Revenue's appeal and ruling in favor of the respondent on both substantial questions of law.

This detailed analysis covers the issues of refund claim under the Central Excise Act, unjust enrichment, appeal against refund transfer, challenge on documents produced, and the allegation of tax collection from another party, providing a comprehensive understanding of the judgment.