2018 (12) TMI 554 - AT - Service Tax

Refund of service tax paid on reverse charge basis - service received from the abroad for the period prior to 18.04.2006 - rejection of refund on the ground of unjust enrichment - principles of natural justice - Held that - Necessary documents to prove that there is no unjust enrichment has not been submitted by appellant before original authority. Before Commissioner (Appeals) also they only submitted balance sheet and CA certificate however no further details like Ledger Schedule etc. in support of the balance sheet were submitted before Commissioner (Appeals). Therefore in absence of such documents it is not possible to ascertain that whether the incidence of service tax paid and claimed as refund was passed on to any other person or otherwise. In interest of justice an opportunity can be given to the appellant to satisfy the sanctioning authority regarding the issue of unjust enrichment by producing all the necessary documents - appeal allowed by way of remand.

Summary

Issues involved:
Refund of service tax paid on reverse charge basis for services received from abroad prior to 18.04.2006; unjust enrichment.

Analysis:
The appellant sought a refund of service tax paid on reverse charge basis for services received from abroad before 18.04.2006, arguing that the tax was not payable in that manner during that period. The claim was rejected by the original authority solely on the grounds of unjust enrichment. The appellant contended that the amount was not passed on to any other person as evidenced by the balance sheet for 2007-2008, where the refund amount was shown as receivable. The appellant cited various judgments to support their case. The Deputy Commissioner representing the Revenue reiterated the findings of the impugned order, emphasizing that the refund amount was not shown as receivable in the balance sheet until 2007-2008, and thus, the incidence of the refund amount being passed on to another party was not disproved. The Revenue also raised the issue of the refund being time-barred, although it was not mentioned in the show cause notice.

Upon careful consideration, the Tribunal noted that the appellant failed to submit necessary documents before the original authority to prove the absence of unjust enrichment. Although a balance sheet and a CA certificate were presented before the Commissioner (Appeals), no further supporting details were provided. The Tribunal observed the lack of relevant documents such as ledgers, schedules, and certificates from the period when the services were provided (1997-2002). The documents from 2007-08 were deemed irrelevant for the examination. Consequently, the Tribunal decided to give the appellant an opportunity to address the issue of unjust enrichment by producing all essential documents. The impugned order was set aside, and the appeal was allowed by remanding the case to the adjudicating authority for a fresh decision in accordance with the law.

This judgment highlights the importance of providing comprehensive documentation to establish the absence of unjust enrichment in refund claims related to service tax paid on a reverse charge basis for services received from abroad before a specific legislative change. The decision underscores the need for thorough evidence and relevant documents to support refund claims and avoid issues of unjust enrichment.