2013 (11) TMI 1358 - AT - Service Tax

Claim for refund of duty - Section 11B - Held that - This is a case where the appellant had passed on the service tax incidence, for which refund is now being claimed, to another party. In such a situation provisions of Section 11B is clearly applicable and a mistake made by another Deputy Commissioner cannot be reason enough to overrule the provisions of Section 11B of the Central Excise Act - Decided against assessee.

Summary

Issues:
1. Failure of the appellant to appear for hearing.
2. Dispute regarding the collection and deposition of service tax.
3. Refund claim rejected based on unjust enrichment.
4. Discrepancy in treatment of refund claims by different divisions.
5. Disagreement on passing on the tax incidence to another party.

Issue 1: Failure of the appellant to appear for hearing
The appellant failed to appear for the hearing despite multiple notices and no request for adjournment. The learned AR for Revenue was heard, and the case records were studied for final disposal of the appeal.

Issue 2: Dispute regarding the collection and deposition of service tax
The appellant, a dealer in motor cycles, provided 'free service' to vehicles sold during the warranty period and collected service tax from customers. They also collected 50% of tax from Hero Honda Motors Ltd. but did not deposit this amount with the Government. The Tribunal held that the demand for tax on the amount reimbursed by Hero Honda Motors Ltd. was not sustainable, as the collected amounts from buyers were already credited into the Government account.

Issue 3: Refund claim rejected based on unjust enrichment
The appellant filed a refund claim for service tax collected and deposited, which was rejected on the grounds of unjust enrichment by the Assistant Commissioner and upheld by the Commissioner (Appeals). The Commissioner noted that the appellant had struck off the declaration regarding passing on the tax incidence, indicating unjust enrichment.

Issue 4: Discrepancy in treatment of refund claims by different divisions
The appellant argued that a similar refund claim in another jurisdiction was sanctioned without unjust enrichment, highlighting a discrepancy in treatment. However, the learned AR emphasized that passing on the tax incidence to another party made the provisions of Section 11B applicable, rejecting the argument based on the decision in another division.

Issue 5: Disagreement on passing on the tax incidence to another party
The Tribunal concluded that the appellant had passed on the service tax incidence to Hero Honda Motors Ltd., making the provisions of Section 11B applicable. The Tribunal held that the mistake made by another Deputy Commissioner in a different case could not overrule the provisions of Section 11B, rejecting the appeal filed by the appellant.

In conclusion, the judgment addressed the failure of the appellant to appear for the hearing, the dispute over the collection and deposition of service tax, the rejection of the refund claim based on unjust enrichment, the discrepancy in treatment of refund claims by different divisions, and the disagreement on passing on the tax incidence to another party. The Tribunal upheld the decision rejecting the refund claim, emphasizing the applicability of Section 11B in cases of passing on the tax incidence to another party.