2018 (3) TMI 703 - AT - Service Tax

Refund claim - unjust enrichment - Section 11B of Central Excise Act, 1944 - Held that - the Lower Authorities did not have the benefit of said precedent ruling of this Tribunal nor they had the advantage of said certificate dated 29/11/2017 issued by Chartered Accountant - matter remanded to the Learned Commissioner (Appeals) with a direction to examine the issue.

Summary

Issues:
Claim for refund of service tax paid under reverse charge mechanism on transportation of food.
Rejection of refund claim based on unjust enrichment under Section 11B of Central Excise Act, 1944.
Appellant's contention of not passing on the service tax burden to buyers.
Applicability of Section 11B in service tax matters.
Role of Chartered Accountant's certificate in proving non-passing of duty incidence.
Precedent rulings supporting non-refund based on unjust enrichment.
Remand of the matter based on new evidence.

Analysis:
The appeal was against the Order-in-Appeal rejecting a claim for refund of service tax paid on transportation of Weaning Food under reverse charge mechanism. The appellant supplied the food to the State Government and paid service tax amounting to &8377;26,08,539 during a specific period. The claim was rejected initially due to the failure of the appellant to prove that the duty incidence had not been passed on to the buyers, invoking Section 11B of the Central Excise Act, 1944. The Commissioner (Appeals) upheld the rejection, emphasizing the appellant's inability to demonstrate non-passing of the tax burden to buyers.

The Commissioner (Appeals) noted that the exemption of service tax on transportation of food was not contested by the Revenue. The appellant argued that they paid the tax inadvertently above the fixed transportation rate by the buyer. The Commissioner highlighted the importance of Section 11B, requiring the applicant to establish non-passing of the duty incidence. Referring to legal precedents, the Commissioner emphasized the significance of a Chartered Accountant's certificate to prove non-passing of the tax burden. The Commissioner cited cases where the absence of the refund amount in the books as "claims receivable" supported the claim of non-unjust enrichment.

The appellant, after the Order-in-Appeal, obtained a certificate from a Chartered Accountant certifying non-recovery of the service tax amount from the buyers. Citing a precedent ruling of the Tribunal supporting such certificates, the appellant presented new evidence. The Tribunal, considering this new evidence, remanded the matter back to the Commissioner (Appeals) for reevaluation in light of the certificate and the precedent decision, setting aside the original Order-in-Appeal. The remand was based on the lack of consideration of the certificate and the precedent ruling by the lower authorities.

In conclusion, the judgment revolved around the rejection of a refund claim based on unjust enrichment, the requirement to prove non-passing of duty incidence under Section 11B, the significance of a Chartered Accountant's certificate, and the impact of precedent rulings on such matters. The remand was ordered based on the presentation of new evidence supporting the appellant's claim of non-passing on the tax burden to the buyers.