2014 (12) TMI 422 - AT - Service Tax

Rectification of mistake - Refund/rebate claim - Unjust enrichment - Held that - There is no whisper anywhere of the unjust enrichment being involved except in one case. Therefore the lower appellate authority is not required to given any finding on an issue which was not urged before him. Therefore the ground taken by the Revenue that it had urged this point before the lower appellate authority is not borne out from the records and therefore it cannot be said that there is an error apparent on the face of the record committed by this Tribunal. We further observe that while disposing of the appeal filed by the Revenue we have also observed that the transaction involved is one of export and therefore the service provider is rightly entitled for the refund of the service tax paid. The learned counsel for the respondent also submits that even in respect of the export transaction if tax is recovered from the customers the same would not disentitle the tax payer from claiming refund as held by the hon ble Bombay High Court in the case of Uttam Steel Ltd. vs. Union of India 2003 (8) TMI 55 - HIGH COURT OF JUDICATURE AT BOMBAY . In Rashtriya Chemicals & Fertilizers Ltd. 2013 (3) TMI 478 - CESTAT MUMBAI this Tribunal observed that even if grounds have been taken in appeal memorandum but if the same is neither urged nor argued at the time of hearing there cannot be any mistake which involves rectification. The same view was affirmed by the hon ble High Court of Bombay in the same case reported in 2013 (10) TMI 1193 - BOMBAY HIGH COURT - there is no merit in the contention urged in the Rectification of Mistake Application filed by the Revenue - Rectification denied.

Summary

Issues:
Rectification of mistake application regarding refund claims for telecom services provided to foreign telecom service providers; Implementation of tribunal's order by Revenue; Conditions imposed by Revenue for granting refund; Consideration of unjust enrichment principle in refund claims.

Issue 1: Rectification of Mistake Application

The Revenue filed a rectification of mistake application concerning a tribunal's order directing the jurisdictional Assistant Commissioner to process rebate/refund claims for telecom services provided to foreign telecom service providers. The tribunal had held that such services amounted to export of service under the Export of Service Rules, 2005, entitling the service provider to a refund of service tax paid.

Issue 2: Implementation of Tribunal's Order by Revenue

Despite the tribunal's order, the Revenue did not implement the directive to dispose of the rebate/refund claims promptly. Consequently, the service provider filed a miscellaneous application, leading to the tribunal instructing the Revenue to file an undertaking to execute the order within three working days of disposing of the rectification of mistake application.

Issue 3: Conditions Imposed by Revenue for Granting Refund

The Revenue, in its undertaking, attempted to impose conditions for granting refunds beyond the tribunal's directive. The tribunal clarified that the Revenue cannot unilaterally set conditions for refund disbursement, emphasizing that the refund should not be subject to additional requirements beyond what was presented during the case proceedings.

Issue 4: Consideration of Unjust Enrichment Principle

The Revenue contended that the tribunal had not addressed the principle of unjust enrichment in the refund claims. However, the tribunal highlighted that the Revenue failed to provide documentary evidence supporting unjust enrichment by the service provider. The tribunal noted that the lower appellate authority did not need to address issues not raised before it, and reiterated that even if service tax was collected from customers, it did not disqualify the service provider from claiming a refund.

This judgment delves into the rectification of a mistake application, the implementation of tribunal orders, conditions for granting refunds, and the consideration of the unjust enrichment principle in refund claims for telecom services provided to foreign entities. The tribunal emphasized the need for evidence to support claims of unjust enrichment and clarified that the Revenue cannot unilaterally impose additional conditions for refund disbursement. Ultimately, the tribunal rejected the rectification of mistake application, affirming the service provider's entitlement to a refund as per the original order.