9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (6) TMI 904 - AT - Service TaxRefund of service tax paid - Amount deposited during pendency of investigation - applicability of unjust enrichment - Tribunal on merit of claim held that no service tax is payable - refund allowed but the said amount was directed to be credited in the Consumer Welfare Fund under Section 11B(2) of the Central Excise Act, 1944 - HELD THAT - Any amount deposited during the pendency of adjudication or investigation is in the nature of a deposit and, therefore, cannot be towards payment of service tax or excise duty. The principles of unjust enrichment, therefore, would not apply if a refund is claimed for refund of this amount - reliance placed in the case of COMMR. OF CUS., BANGALORE VERSUS MOTOROLA INDIA PVT. LTD. 2006 (4) TMI 390 - CESTAT, BANGALORE . In the present case, it is not in dispute that the Appellant had deposited ₹ 1 Crore when the raid was conducted on 6 October, 2003 and subsequently an amount of ₹ 11,36,840/- on 27 October, 2003. Both the amount were deposited much before the issuance of the show cause notice on 24 August, 2004. It is not in dispute that on the application filed by the Appellant for refund of this amount, the adjudicating authority did sanction the refund of ₹ 1,11,36,840/- but it directed the said amount to be deposited in the Consumer Welfare Fund because of the principles of unjust enrichment. This Order was upheld by the Commissioner(Appeals) for the same reason. This view is apparently contrary to the consistent view of the High Courts and the Tribunal. The Appellant would, therefore, be clearly entitled to the refund of ₹ 1,11,36,840/-. Amount collected but not deposited to the Government - Applicability of Sections 73A and 73B of the Act - recovery of the amount - HELD THAT - Section 73 A of the Act which came into effect from 18 April 2006, provides a complete answer to this issue. Section 73 A deals with service tax collected from any person to be deposited with Central Government. While sub-section (1) deals with service tax collected in excess of the service tax assessed or determined, sub-section (2) deals with any person who has collected any amount which is not required to be collected from any other person, in any manner as representing service tax. Sub-section (2) in such a situation would be applicable. Such a person is required to forthwith pay the amount so collected to the credit of the Central Government. It shall, therefore, be open to the Department to proceed strictly in accordance with the provisions of Sections 73A and 73B of the Act to recover the amount alleged to have been collected by the Appellant as service tax after issuance of a show cause notice. The Appellant shall be given an adequate opportunity to substantiate its case that it had not collected service tax but had only collected service charges . Appeal disposed off.
Issues Involved:
1. Classification of services provided by the Appellant. 2. Liability to pay service tax. 3. Refund of service tax deposited during investigation. 4. Doctrine of unjust enrichment. 5. Application of Sections 73A and 73B of the Finance Act, 1994. Detailed Analysis: 1. Classification of Services Provided by the Appellant: The Tribunal examined the nature of the activity conducted by the Appellant, which involved providing online computer courses. It was determined that the services fell under the category of "Commercial Training or Coaching" as defined under Section 65(27) of the Finance Act, 1994, rather than "Online Information Database Access and/or Retrieval Services" defined under Section 65(75) of the Finance Act, 1994. The Tribunal concluded that since the Appellant was a computer training institute engaged in organizing computer courses, it was eligible for the benefit of the Exemption Notification dated 20 June, 2003, and thus, the activity would not attract service tax. 2. Liability to Pay Service Tax: The Appellant argued that the services rendered fell under "Commercial Training and Coaching," which were exempt from service tax. Despite this, during an investigation, the Appellant deposited ?1 Crore and subsequently ?11,36,840/- under pressure. The adjudicating officer did not accept the Appellant's contentions and confirmed the demand for service tax, appropriating the deposited amount towards the demand. However, the Tribunal set aside this order, concluding that the Appellant's activities did not attract service tax. 3. Refund of Service Tax Deposited During Investigation: Following the Tribunal's order, the Appellant filed for a refund of ?1,11,36,840/-. The adjudicating authority sanctioned the refund but directed it to be credited to the Consumer Welfare Fund due to the doctrine of unjust enrichment. The Tribunal found that amounts deposited during the course of investigation are in the nature of deposits made under protest and not payments towards service tax. Therefore, the principles of unjust enrichment would not apply. The Tribunal referred to several decisions, including those of the Madras High Court in Pricol Ltd. and the Allahabad High Court in EBIZ. Com Pvt. Ltd., which supported this view. 4. Doctrine of Unjust Enrichment: The Tribunal held that the doctrine of unjust enrichment would not apply to amounts deposited during investigation. The Appellant had argued that no service tax had been collected from customers, only service charges, and thus the question of unjust enrichment did not arise. The Tribunal supported this argument, citing consistent judicial precedents that amounts deposited during investigations are considered deposits under protest, exempting them from the doctrine of unjust enrichment. 5. Application of Sections 73A and 73B of the Finance Act, 1994: The Tribunal noted that if the Appellant had collected service tax from customers but not deposited it with the Government, Section 73A of the Finance Act, 1994, would apply. This section mandates that any amount collected as representing service tax must be deposited with the Government. The Tribunal allowed the Department to proceed under Sections 73A and 73B to recover any such amounts, provided a show cause notice is issued to the Appellant, and the Appellant is given an opportunity to substantiate its case that only service charges, not service tax, were collected. Conclusion: The Tribunal set aside the order of the Commissioner (Appeals) dated 29 April, 2013, and directed the refund of ?1,11,36,840/- to the Appellant within two months. It left open the possibility for the Department to take recourse to Sections 73A and 73B of the Finance Act, 1994, to recover any amounts collected as service tax, following due process.
|
