2017 (12) TMI 1094 - AT - Service Tax

Refund claim - service tax paid which was not required to be paid in view of the exemption - denial on the ground of unjust enrichment - Held that - the judgment in Writ Petition has not been considered by the Commissioner (A) at all and as per the judgment, the appellant alleged that he has refunded the said amount to the service provider - this case needs to be remanded to the original authority to verify that the appellant has refunded the said amount to the service provider or not - appeal allowed by way of remand.

Summary

Issues involved:
Refund of service tax paid on transportation of food grains, unjust enrichment principle, credit to Consumer Welfare Fund, remand for verification of refund to service provider.

Analysis:
The appeal was filed against an order modifying the refund of service tax to be credited to the Consumer Welfare Fund. The appellant, a government organization, paid service tax on transportation services despite an exemption being available. The lower authority rejected the refund claim citing unjust enrichment, as the tax was passed on to the service provider. The appellant argued that they had refunded the amount to the service provider as per a High Court judgment. The Tribunal found that the judgment was not considered by the lower authority and remanded the case for verification of the refund to the service provider.

The key issue in the case was whether the appellant was entitled to a refund of service tax paid on transportation services. The appellant contended that they had refunded the amount to the service provider following a High Court judgment. The Tribunal observed that the lower authority did not consider this fact and decided to remand the case for verification.

The principle of unjust enrichment was crucial in determining the eligibility for a refund. The lower authority rejected the claim based on this principle, stating that the tax incidence was passed on to the service provider. The appellant argued against this, claiming to have refunded the amount. The Tribunal decided to remand the case to ascertain the refund status, considering the appellant's submission and the High Court judgment.

The Tribunal's decision to remand the case highlighted the importance of verifying the refund to the service provider. The Tribunal noted that the lower authority did not consider the appellant's claim of refunding the amount. Therefore, a fresh order was deemed necessary to address this aspect, emphasizing the need to adhere to the High Court judgment and ensure proper verification before finalizing the refund process.

In conclusion, the Tribunal remanded the case for verification of the appellant's refund to the service provider, emphasizing the need to consider all relevant facts, including the High Court judgment. This decision aimed to ensure a fair and accurate assessment of the refund claim, in line with legal principles and precedents.