2018 (2) TMI 1888 - AT - Service Tax

Refund claim - principles of unjust enrichment - service tax paid on transportation of goods to the premises of M/s. Ispat Industries Ltd. - HELD THAT - In this case, there is no scope of taking any cenvat credit on the basis of challan of the appellant inasmuch as, in the challan, the name of the recipient M/s. Ispat Industries has not been mentioned. Since the name of the consignee i.e. Ispat Industries is not finding place in the challan of the appellant, it can be construed that such recipient of service has not availed any cenvat benefit in respect of the service tax paid by the appellant. There is no question of passing of any service tax incidence to the service receiver and accordingly, the doctrine of unjust enrichment will have no application in this case, for denial of the refund benefit. There are no merits in the impugned order, in dismissing the appeal of the appellant on the ground of unjust enrichment - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Double payment of service tax by the service provider and the service receiver
- Rejection of refund application on the ground of unjust enrichment

Analysis:
1. Double Payment of Service Tax:
The appellant, engaged in providing services under the taxable category of goods transport agency, had inadvertently paid service tax into the Government Account for transporting goods to M/s. Ispat Industries Ltd. The recipient of service, M/s. Ispat Industries, had also paid the service tax on the agency service. The appellant filed a refund application, which was rejected by the original authority on both merit and limitation grounds. However, the Commissioner (Appeals) allowed the appeal on merits but rejected it on the basis of unjust enrichment, stating that the appellant failed to show that the service tax incidence was not passed on to any other person.

2. Unjust Enrichment and Refund:
The Tribunal noted that both the appellant and the service receiver had deposited service tax into the Government Exchequer for the goods transport agency service. Since the recipient of service, M/s. Ispat Industries, a manufacturer of excisable goods, had taken cenvat credit based on the tax payment evidence, it was crucial to establish that the service tax incidence was not passed on to them. The Tribunal observed that since the recipient's name was not mentioned in the appellant's challan, it indicated that M/s. Ispat Industries did not avail any cenvat benefit regarding the service tax paid by the appellant. Consequently, the doctrine of unjust enrichment did not apply, and the refund benefit could not be denied.

In conclusion, the Tribunal found no merit in the rejection of the appeal on the grounds of unjust enrichment. The order dismissing the appeal was set aside, and the appeal was allowed in favor of the appellant with consequential benefits.