2021 (9) TMI 293 - AT - Service Tax

Refund claim - tax liability discharged by the appellant twice - unjust enrichment - recoverable arrears pending in respect of the appellant or not - HELD THAT - It is observed that there is no dispute about the fact that account No. D001 was never a registered account allotted to the appellant for discharging his service tax liability as the registration process for the said account, admittedly could not get completed. There is also no dispute for account No.D002 to have been the active and valid account in the name of appellant facilitating him to discharge his liability towards the taxable services being rendered by him. It is also observed from the record that the impugned refund claim was forwarded to the jurisdictional range officer calling for a verification report. The verification report of the department itself, is falsifying the said case and is supporting the appellant s contention that the same liability has been discharged twice by the appellant once inadvertently in the inactive account, subsequently, in the active account - no other evidence was required to be produced by the appellant. Otherwise also it is a settled law that onus always rests upon the department to prove the allegations raised in the show cause notice. The appellant at the time of arguments has laid emphasis on CA certificate corroborating the appellant s contention. No doubt the said certificate was not produced before the adjudicating authorities below but as already observed above, there were two verification reports by the range officers including that of the jurisdictional range officer supporting the fact that there is no possibility of any invoice or any return pertaining to the account No.D001, the account being inactive for being never registered in the name of the appellant - It is apparent that learned Commissioner (Appeals) has ignored the verification done by the department itself which proves that there is no such liability towards the appellant for the impugned period which require deposit of ₹ 9,16,735/- twice - thus, refund was rightly been filed. Appeal allowed - decided in favor of appellant.

Issues:
Claim for refund of mistakenly deposited tax amount in inactive account, rejection of refund claim, production of additional evidence, verification reports by range officers, liability for double payment, unjust enrichment, bar of limitation for refund claim.

Detailed Analysis:

1. Refund Claim for Mistakenly Deposited Tax Amount:
The appellant mistakenly deposited an amount in an inactive account instead of the registered account. The appellant subsequently rectified the error by depositing the amount in the correct account. The appellant filed a refund claim for the amount deposited in the inactive account, which was initially rejected. The appellant contended that the payment was made twice against the same liability and deserved a refund.

2. Rejection of Refund Claim:
The jurisdictional range officer's verification report supported the appellant's claim, stating that the payment was made twice, and the refund claim was not hit by unjust enrichment. The departmental representative objected to the production of additional evidence, citing delay and legal precedents. However, the reports confirmed no recoverable arrears and supported the appellant's case.

3. Production of Additional Evidence:
The appellant produced a certificate from their Chartered Accountant certifying no double collection of service tax. The department objected to the belated production of this certificate. Despite this objection, the reports from range officers corroborated the appellant's position, indicating no liability for double payment.

4. Verification Reports by Range Officers:
Reports from range officers confirmed that the inactive account was never used for services, and the appellant had already received a refund in a similar situation previously. These reports were issued before the show cause notice, questioning the need for the notice itself. The reports supported the appellant's claim of inadvertently paying twice for the same liability.

5. Liability for Double Payment and Unjust Enrichment:
The department argued that the appellant was not entitled to a refund due to the delay in filing the claim and the alleged double payment. However, the verification reports and lack of evidence of separate liabilities contradicted this argument. The reports indicated no recoverable arrears and supported the appellant's refund claim.

6. Bar of Limitation for Refund Claim:
Despite the delay in filing the refund claim, it was within one year of the payment in the inactive account. The appellant's actions were deemed justified considering the circumstances and the verification reports supporting the refund claim.

7. Judgment and Conclusion:
The Tribunal set aside the order rejecting the refund claim, emphasizing the verification reports and lack of evidence of separate liabilities. The appellant's refund claim was deemed valid, and the appeal was allowed, highlighting the importance of supporting evidence and the onus on the department to prove allegations in a show cause notice.

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