2019 (8) TMI 78 - AT - Service Tax

Refund of service tax - unjust enrichment - case of appellant is that the Doctrine of Unjust Enrichment is not applicable in the present case because they have not passed on the incidence of service tax to the service recipient - HELD THAT - The Commissioner (A) has observed that the original authority has verified the books of accounts and all the documents relating to building contracts and has found that the appellant has collected the service tax from their clients. In view of this categorical finding of the Commissioner (A) that incidence of service tax has been passed on to the service recipient, it can be held that the present claim is hit by Doctrine of Unjust Enrichment. Refund cannot be allowed - Appeal dismissed - decided against appellant.

Summary

Issues:
Refund claim rejection based on Doctrine of Unjust Enrichment.

Analysis:
The appeal was against the rejection of a refund claim of ?41,00,129 by the Commissioner (A) due to limitation issues with 21 out of 23 challans. The appeal specifically focused on a refund of ?6,04,500 related to two challans. The appellant argued that the rejection was improper as the tax incidence was not passed on to the service recipient, supported by a Chartered Accountant certificate. The appellant cited relevant case laws to support their position.

The respondent defended the impugned order, stating that the lower authorities confirmed that the appellant had collected service tax from their clients, making them ineligible for a refund. The Commissioner (A) provided detailed reasons for rejecting the claim, emphasizing that the tax incidence had indeed been passed on to the service recipients.

After reviewing the submissions and evidence, the tribunal found that the crucial issue revolved around the applicability of the Doctrine of Unjust Enrichment. The appellant contended that this doctrine did not apply as they had not passed on the tax burden, backed by the Chartered Accountant certificate. However, the Commissioner (A) had verified the books and documents, concluding that the tax had been collected from clients. This finding led to the dismissal of the appeal, upholding the rejection of the refund claim based on the Doctrine of Unjust Enrichment.

The tribunal upheld the impugned order, emphasizing the Commissioner's categorical finding that the tax burden had been transferred to the service recipients. Consequently, the appeal was dismissed, affirming the rejection of the refund claim.