2018 (7) TMI 1718 - AT - Service Tax

Refund of Service Tax - rejection on the ground of time limitation and unjust enrichment - Section 11B of CEA - Held that - The services rendered by the appellant to the Padampat Singhania University by way of catering were not liable to Service Tax during the period when such Service Tax was paid. The refund claimed through claim dated 24/04/14 is partly hit by time bar and the lower authority rejected the claim of ₹ 6,36,943/- this merits no interference and is upheld. Unjust enrichment - Held that - From the certificate dated 10/07/2014 issued by their CA, it is evident that the refund amount has not been retained by the appellant. The University has also confirmed having recovered the amount back from the appellant - he appellant has succeeded in convincing that the amount claimed as refund is not hit by unjust enrichment. Appeal allowed in part.

Summary

Issues:
Refund claim rejection on grounds of unjust enrichment and time bar.

Analysis:
The appellant, a catering service provider, charged Service Tax to M/s Sir Padampat Singhania University from January 2013 to November 2013. Subsequently, they realized their services were exempted from Service Tax as per Notification No. 25/2012-ST. A refund claim was filed on 24/04/2014. The lower authorities rejected a portion of the claim (?6,36,943) due to being time-barred under Section 11B and credited the balance (?9,96,450) to the Consumer Welfare Fund for unjust enrichment. The appellant contended that they were unaware of the exemption and provided evidence from the university and their CA to support that the amount was not retained by them.

The appellant argued that the lower authorities unfairly rejected the refund claim based on unjust enrichment. They presented a letter from the university confirming the recovery of the amount and a certificate from their CA stating that the refund amount was not collected by them. Therefore, they requested the refund to be paid to them in cash instead of being credited to the Consumer Welfare Fund.

The Revenue contended that the portion of the refund claim hit by time bar should not be considered, and reiterated the lower authority's finding on the unjust enrichment issue for the remaining amount.

After considering both sides and examining the records, the Tribunal found that the Service Tax was paid due to ignorance of the exemption. They upheld the rejection of the time-barred portion of the claim. However, they observed that the appellant successfully proved that the refund amount was not unjustly enriched as evidenced by the CA certificate and the university's confirmation. Consequently, the Tribunal allowed the appeal, ordering the refund to be paid to the appellant instead of being credited to the Consumer Welfare Fund.