2016 (11) TMI 195 - AT - Service Tax

Rejection of refund claim - contract with ONGC for execution of job under MSP Platform project and said job is based on turn-key basis - turn-key and work contract - limitation bar - Held that - the appellant had deposited the amount in the month of March 2005, May 2005, September 05 and November 2005. As regards the amount deposited by the appellant as service tax liability, nothing is brought on record that the said amounts were deposited by them on the directions of Revenue authorities; that the amounts were deposited under protest. It is seen from the records the appellant themselves have classified the services under the category of Commissioning, Installation and Consulting Engineering Services and paid the service tax liability - refund application filed on 21.06.2006 for the amount deposited in March 2005 and May 2005 are hit by limitation. Unjust enrichment - Held that - On perusal of the contract entered with the ONGC, we find that the said contract is lump-sum contract. The service tax liability paid by the appellant is calculated by working back from the lumpsum contracted amount. In short the appellant had received an amount as per contract nothing more and nothing less. When the appellant himself has calculated the tax liability from the amount received from ONGC by working backwards, it cannot be now said that they have not collected the amount of service tax from ONGC; especially when there is no dispute that they have received in full the contracted amount. Further, we find that the claim of the learned Counsel as to the service tax liability does not arise on the services rendered by them is without any basis inasmuch as vivisecting the contract entered with ONGC was done by appellant himself and discharged the service tax liability. Appeal dismissed - decided against appellant.

Summary

Issues:
Refund of service tax paid during March 2005 to November 2005, limitation period for refund claims, unjust enrichment in service tax payment.

Analysis:
1. Refund of Service Tax Paid: The appellant filed refund claims for service tax paid on a contract with ONGC. The appellant argued that the service tax liability did not arise as the contract was a turn-key project and not taxable before 01.06.2007. The lower authorities rejected the refund claim citing limitation and unjust enrichment issues.

2. Limitation Period for Refund Claims: The tribunal found that the service tax paid in March 2005 and May 2005 was outside the limitation period as per Section 11B of the Central Excise Act, 1944. The appellant did not deposit the amounts under protest, leading to the rejection of the refund claims for these periods.

3. Unjust Enrichment in Service Tax Payment: Regarding the service tax paid in September 2005 and November 2005, the tribunal noted that the appellant calculated the tax liability from the lump-sum contract amount received from ONGC. As the appellant received the full contracted amount, it was deemed that they had collected the service tax from ONGC. The tribunal dismissed the argument that the service tax liability did not arise based on the contract entered, as the appellant had voluntarily calculated and paid the tax.

4. Judgment: The tribunal upheld the lower authorities' decision, rejecting the appeal for refund of service tax paid during March 2005 to November 2005. The tribunal found no merit in the appellant's contentions and affirmed the impugned order. The appeal was dismissed accordingly.