2016 (3) TMI 138 - AT - Service Tax

Refund claim - Entitlement of appellant to claim refund as service recipient when wrongly collected from him - Held that as the appellant has paid the Service Tax which was not liable to be collected from him, and the same is admittedly deposited with the Revenue, the appellant is entitled to refund of the Service Tax wrongly collected from him. - Decided in favour of appellant

Summary

Issues:
1. Appeal against rejection of refund claim by the Commissioner of Central Excise (Appeals).
2. Claim of refund of Service Tax paid by the appellant for occupying a Mandap for marriage purposes.
3. Interpretation of the definition of 'Social Function' under the Finance Act, 1994.
4. Entitlement of the appellant to claim refund as the service receiver.
5. Application of the principle of unjust enrichment in the context of refund claims.
6. Authority to claim refund - service receiver or service provider.
7. Applicability of retrospective effect to the Explanation inserted in the Finance Act, 1994.

Analysis:
1. The appellant appealed against the rejection of the refund claim by the Commissioner of Central Excise (Appeals) concerning the payment of Service Tax for occupying a Mandap for marriage purposes. The appellant contested the levy of Service Tax, claiming it was not chargeable but had to deposit it under pressure. The Commissioner held that only the Mandap Keeper, as the assessee, could claim the refund, not the service receiver. The appellant further appealed before the Tribunal, disputing this decision.

2. The appellant argued that during the relevant period, the occupation of Mandap for marriage purposes was not taxable as it fell under the category of 'Social Function.' The appellant referred to an Explanation inserted in the Finance Act, 1994, which included marriage under the definition of 'Social Function' effective from 1-6-2007. The appellant contended that prior to this amendment, marriage was not included under 'Social Function,' and thus, the tax collection was unauthorized. The Tribunal acknowledged that the appellant paid Service Tax erroneously collected from him and held him entitled to a refund, citing similar cases where refunds were granted to purchasers of flats.

3. The Tribunal rejected the argument that only the assessee, not the service receiver, could claim a refund, emphasizing that the appellant, as the one who paid the tax, was entitled to it. The Tribunal also noted that the Commissioner (Appeals) erred in denying the refund on the grounds that the appellant was not an assessee. Consequently, the Tribunal allowed the appeal, granting the appellant a refund of the wrongly collected Service Tax with interest and directed the adjudicating authority to disburse the refund within 30 days from the date of the order.