2007 (9) TMI 187 - AT - Service Tax

In impugned case Appellant, service recipient has borne incidence of duty so has locus standi to file the refund claim - provisions of unjust enrichment is not applicable - Issue has not been decided on merits and on unjust enrichment Matter remanded to Original Authority for de novo consideration

Summary

Issues:
Refusal of refund application based on locus standi under Section 11B of Central Excise Act.

Analysis:
The appeal stemmed from the rejection of the assessee's refund application citing lack of locus standi under Section 11B of the Central Excise Act. The authorities contended that the appellant, who had paid Service Tax through M/s. Biju Sales Corporation, was ineligible to file a refund application as they had not directly paid the tax. The appellant argued that they had borne the tax burden and were entitled to a refund, supported by balance sheets, TR-6 Challans, and vouchers. The appellant referenced Notification No. 13/2003-S.T., claiming exemption for Commission Agents from Service Tax on consignment sales pre-9-7-2004. The learned Counsel pointed out a similar case, S. P. Fabricators Pvt. Ltd. v. CC, Bangalore, where the Tribunal ruled that a person discharging the tax is eligible for a refund.

The Tribunal noted a previous case where the Revenue rejected a refund claim by S. P. Fabricators Pvt. Ltd., citing lack of locus standi. However, the Tribunal overturned this decision upon finding that the appellant had borne the duty burden, supported by CT-3 certificates, and thus had the right to seek a refund. The Tribunal referenced the Apex Court judgment in IDL Chemicals Ltd. v. UOI, emphasizing that the burden of duty payment does not solely depend on being a licensee of the Deputy Commissioner, and a manufacturer who has borne the duty burden can file a refund claim. The Tribunal set aside the impugned order and remanded the matter for a fresh examination on merits, excluding the locus standi issue.

The Tribunal reiterated that the appellant was eligible to file a refund application and produce necessary evidence to prove entitlement without unjust enrichment. The matter was remanded to the Original Authority for reconsideration within four months, emphasizing adherence to the Principles of Natural Justice. The appeal was allowed by remanding it to the Original Authority for further proceedings.