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2018 (6) TMI 1147 - AT - Service Tax


Issues:
- Appeal against order-in-appeal passed by Commissioner of Central Excise
- Applicability of exemption Notification 25/2012 ST on transportation services
- Refund claim for service tax paid
- Allegation of unjust enrichment

Analysis:
1. Appeal against order-in-appeal: The case involves an appeal against the order-in-appeal passed by the Commissioner of Central Excise (Appeals), Rajkot. The appellant had entered into an agreement with M/s Indian Potash Limited for transportation services, leading to the payment of service tax, which was later claimed as a refund due to the services being exempted from service tax by Notification No. 25/2012 ST. The Revenue appealed the refund claim, leading to the present appeal.

2. Applicability of exemption Notification 25/2012 ST: The key contention was the applicability of exemption Notification 25/2012 ST, which exempts certain transportation services from service tax. The Tribunal analyzed the agreement between the parties and the nature of services provided, concluding that the transportation of chemical fertilizer, such as Murate of Potash, from vessel to shore falls under the exempted category. The Tribunal highlighted the specific goods exempted under the notification, supporting the appellant's claim for a refund based on the exempted nature of the service provided.

3. Refund claim for service tax paid: The appellant had paid service tax for the transportation services provided, totaling a significant amount. However, upon realizing the exemption under Notification 25/2012 ST, a refund claim was filed for the service tax paid. The Tribunal reviewed the documents, including invoices and agreements, to ascertain the nature of services and the applicability of the exemption. The Tribunal noted that the appellant had correctly discharged the service tax but was eligible for a refund due to the exempted status of the services provided.

4. Allegation of unjust enrichment: The issue of unjust enrichment was raised concerning whether the burden of service tax had been passed on to customers, thus disqualifying the appellant from claiming a refund. The Tribunal examined the evidence presented, including a Chartered Accountant's certificate and letters from M/s Indian Potash Limited indicating non-reimbursement of service tax, to determine that the burden had not been transferred. The Tribunal found that the appellant had not passed on the service tax burden, as evidenced by their accounting entries and communication with the service receiver, supporting the eligibility for the refund claim.

In conclusion, the Tribunal allowed the appeal, setting aside the order of the Commissioner (Appeals) and restoring the decision of the adjudicating authority to grant the refund of the service tax amount originally sanctioned. The judgment emphasized the correct application of the exemption notification, the eligibility for a refund claim, and the absence of unjust enrichment in passing on the service tax burden to customers, leading to a favorable outcome for the appellant.

 

 

 

 

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