2018 (3) TMI 636 - AT - Service Tax

Refund claim - unjust enrichment - Held that - since, the amount paid towards Service Tax was debited as expense in the books of accounts, a clear inference has to be drawn that the appellant had collected the same either directly or indirectly from its customers - the Service Tax amount in question had not been shown as claims receivable in the balance sheet for the relevant period keeping even the possible realization of disputed amount from Department. Thus, the onus lies with the appellant to prove that it had suffered the incidence of duty and not passed on to any other person has not been satisfactorily discharged. It is not open to the appellant to submit contrary to fact as per accounting done by them in their statutory books. Appeal dismissed - decided against appellant.

Summary

Issues: Refund claim post amalgamation, Doctrine of unjust enrichment, Burden of proof on the appellant.

Refund Claim Post Amalgamation:
The case involved a refund claim by the appellant for Service Tax paid during the disputed period when they provided services to two companies that later amalgamated with the appellant. The appellant argued that post-amalgamation, the entities cannot be considered separate for tax purposes, and thus, the refund should not be credited to the Consumer Welfare Fund but refunded to the appellant. The appellant relied on previous tribunal decisions to support their claim.

Doctrine of Unjust Enrichment:
The Tribunal analyzed the doctrine of unjust enrichment concerning the refund claim. It was observed that since the Service Tax amount was charged to the profit and loss account and shown as an expense in the books of accounts, it indicated that the appellant had collected the tax from its customers. The Tribunal noted that the appellant failed to demonstrate that they had not passed on the tax burden to any other person, as the tax amount was not shown as "claims receivable" in the balance sheet. The Tribunal distinguished previous cases cited by the appellant, emphasizing that the issue here was the accounting treatment of the Service Tax element.

Burden of Proof on the Appellant:
The Tribunal held that the onus was on the appellant to prove that they had borne the tax burden and not transferred it to others. As per the accounting records, the appellant had treated the tax amount as an expense, indicating collection from customers. The Tribunal found no merit in the appellant's argument contrary to their accounting entries and dismissed the appeal, upholding the decision of the Commissioner (Appeals).

In conclusion, the Tribunal dismissed the appeal, stating that the appellant failed to discharge the burden of proof regarding the incidence of duty and unjust enrichment. The decision highlighted the importance of accounting treatment in determining the passing on of tax burden and upheld the order of the Commissioner (Appeals) regarding the refund claim post-amalgamation.