2018 (9) TMI 652 - AT - Service Tax

Refund claim of excess Service Tax paid - unjust enrichment - Held that - Considering the fact that, the appellant is not entitled to avail Cenvat credit of service tax paid on goods transportation charges, therefore, there is no question arises of passing of the Cenvat credit to the buyer - as the appellant has not availed Cenvat credit on service tax paid on transportation charges, he entitled to claim refund claim on access service tax paid by them - refund allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
Refund claim rejection on grounds of unjust enrichment.

Analysis:
The appellant filed an appeal against the rejection of a refund claim by the Ld. Commissioner (Appeal) based on unjust enrichment. The appellant had paid service tax on transportation charges at 100% instead of the correct rate of 25% under the reverse charge mechanism. Upon realizing the excess payment, they filed a refund claim which was initially allowed but later rejected on appeal by the Revenue. The Ld. Counsel argued that the facts of this case were different from the precedent relied upon by the Ld. Commissioner (Appeal) as the appellant had not availed Cenvat credit on the service tax paid on transportation charges, making it impossible to pass on the benefit to the buyer. The Ld. Counsel cited a similar case to support the appellant's claim for a refund of the excess service tax paid.

The Ld. AR, on the other hand, supported the findings of the impugned order. After hearing both parties, the Member (Judicial) noted that since the appellant had not availed Cenvat credit on the service tax paid on transportation charges, the question of passing on the credit to the buyer did not arise. Drawing a distinction from the precedent case, it was held that the decision of the Hon'ble Apex Court in the previous case was not applicable to the present case. Consequently, the Member (Judicial) allowed the appeal, set aside the impugned order, and granted the appellant the refund claim on the excess service tax paid by them.

In conclusion, the appeal was allowed, and the refund claim was granted to the appellant based on the unique circumstances of the case where the appellant had not availed Cenvat credit on the service tax paid on transportation charges, distinguishing it from the precedent case cited by the Ld. Commissioner (Appeal) to reject the claim on grounds of unjust enrichment.