2016 (4) TMI 410 - AT - Service Tax

Period of limitation - Refund claim - First filed within a period of one year as per Section 11B of Central Excise Act 1944 but was returned back for required documents and again filed by respondent after a period of one year - Held that - from the Order-in-Original it is observed that refund claim first filed was complete in all respects. The department was asking for proof of Service Tax paid by M/s. Indu APS CDS Synergy Drilling engaged by the Respondent . The documents being asked for were thus additional documents sought by Revenue to satisfy themselves that service provider has paid 100% Service Tax. Therefore it cannot be said that required documents were not filed by the Respondent alongwith original refund application. Hence refund claim was not time barred. Bar of unjust enrichment - no C.A. certificate was produced by the Respondent before the lower authorities - Held that - the first appellate authority in Order-in-Appeal has held that Respondent herein has not taken CENVAT credit of 50% tax paid on reverse charge basis and has also shown this amount as advances in the books of account for which an affidavit is filed. It is observed from show cause notice that issue of unjust enrichment was nowhere the subject matter of show cause notice. However in the Order-in-Original Adjudicating authority discussed the issue of unjust enrichment at length and also made observations that Respondent herein did not produce any documentary evidence to the effect that burden of proof has not been passed on to any other person. In the interest of justice on the issue of unjust enrichment the matter is required to be remanded back to the Adjudicating authority. Respondent should produce all the documentary evidences including a C.A. s certificate before the Adjudicating authority to establish that refund sought for has not been recovered from any person and was shown in their books of accounts as an amount receivable and that the same has not been built into the expenditure of services being provided by Respondent. - Decided partly in favour of revenue

Summary

Issues:
1. Whether the refund claim is time-barred as per Section 11B of the Central Excise Act, 1944?
2. Whether the doctrine of unjust enrichment is applicable if the refund is payable to the Respondent?

Analysis:

1. Time Barred Refund Claim:
The Revenue contended that the refund claim filed by the Respondent was time-barred as it was not accompanied by the required documents initially. However, the Respondent argued that all essential documents were submitted with the refund claim. The Tribunal noted that the documents requested by the Revenue were additional documents to verify the payment of Service Tax by a service provider engaged by the Respondent. It was observed that the refund claim filed on 4/6/2013 was complete in all respects, and the requested documents were supplementary. The case laws cited by the Revenue were found inapplicable as they pertained to rebate claims under different provisions. The Tribunal upheld the first appellate authority's decision that the refund claim was not time-barred.

2. Doctrine of Unjust Enrichment:
The Respondent asserted that they had not taken CENVAT credit on 50% Service Tax paid on a reverse charge basis and had kept it as advances in their accounts. An affidavit was filed to support this claim. The issue of unjust enrichment was not part of the original show cause notice but was discussed by the Adjudicating authority. The Tribunal decided to remand this issue back to the Adjudicating authority for further consideration. The Respondent was directed to provide all necessary documentary evidence, including a C.A.'s certificate, to establish that the refund sought had not been passed on to any other person and was not included in the cost of services provided. The Adjudicating authority was instructed to provide an opportunity for the Respondent to present their case before making a final decision.

In conclusion, the Tribunal held that the refund claim was not time-barred and remanded the issue of unjust enrichment back to the Adjudicating authority for further examination. The appeal filed by the Revenue was allowed only to the extent indicated in the judgment.