2023 (3) TMI 237 - AT - Service Tax

Rejection of refund claim for refund of service tax filed by the appellant - excess payment of service tax not in dispute - reverse charge mechanism - time limitation - principles of unjust enrichment - HELD THAT - Undisputedly and admittedly appellant has paid certain amounts under reverse charge mechanism by making self assessment of service tax payable under the reverse charge mechanism, on the basis of the Trade License Agreement entered into with their principals at Thailand for the use of their trade name/ brand name. Subsequently the value of the taxable service got revised downwards as after negotiations the period of the agreement was revised and also the consideration to be paid. Accordingly the principals issued the credit note on 31.08.2017 for the period 01.01.2017 to 31.03.2017 and revised invoice 20.10.2017 for the period 01.04.2017 to 30.06.2017. For the period 01.04.2017 to 30.06.2017 appellant had filed the return as prescribed under ST-3 format on 14.08.2017. The present claim for the refund of excess service tax paid has been made by the appellant on 03.04.2018. Appellant submit that as per Article 265 of the Constitution of India, Government cannot retain the excess of tax paid and the same needs to be refunded. Admittedly no revised return as provided for in terms of Rule 7B of the Service Tax Rules, 1994 or under provisions of the Section 142 (9) of the CGST Act has been filed by the appellant. In para 4.6 and 4.7 of the order in original, Assistant Commissioner has recorded specific finding to this effect and impugned order upholds the same in para 11 and 12. It is settled provision in law that the when the statute provides a manner of doing the thing, then the thing has to be done in the prescribed manner only and all other manner are necessarily barred. Principles of unjust enrichment - HELD THAT - The issue of unjust enrichment comes into picture only if the refund is otherwise found admissible. In the case under consideration if the refund is not found admissible, application of the principles of unjust enrichment need not be considered. Appeal dismissed.

Summary

Issues Involved:
1. Refund claim for excess service tax paid.
2. Requirement of filing revised ST-3 return.
3. Application of Section 142(9)(b) of the CGST Act, 2017.
4. Self-assessment and refund eligibility.
5. Doctrine of unjust enrichment.

Detailed Analysis:

1. Refund Claim for Excess Service Tax Paid:
The appellant claimed a refund of Rs. 25,34,528/- for excess service tax paid under reverse charge mechanism due to a downward revision of the trademark fee agreement with East West Seed International Ltd, Thailand. The initial provision was Rs. 2,28,27,342/- with service tax of Rs. 34,24,102/-, later revised to Rs. 59,39,180/- with service tax of Rs. 8,89,574/-.

2. Requirement of Filing Revised ST-3 Return:
The appellant did not file a revised ST-3 return within 45 days from the original filing date as required under Sub-Rule (1) of Rule 7B of the Service Tax Rules, 1994. The revised invoices and credit notes were issued after the permissible period for filing a revised return had lapsed.

3. Application of Section 142(9)(b) of the CGST Act, 2017:
Section 142(9)(b) stipulates that a revised return must be filed within the time limit specified under the existing law for any refund claim to be valid. The appellant's failure to file a revised return within the specified time led to the rejection of the refund claim.

4. Self-Assessment and Refund Eligibility:
The appellant's self-assessment and payment of service tax were based on their own calculations without any direction from the department. The refund claim was considered not admissible as the self-assessment was not varied or altered by any authority. The tribunal cited precedents, including the Supreme Court's decision in ITC Ltd. and others, affirming that a refund claim cannot be entertained unless the original assessment is modified.

5. Doctrine of Unjust Enrichment:
The tribunal noted that the appellant did not provide sufficient evidence to rebut the presumption of passing on the tax burden to customers. The doctrine of unjust enrichment was applied, and the refund claim was dismissed on this ground as well.

Conclusion:
The appeal was dismissed due to non-compliance with procedural requirements, specifically the failure to file a revised ST-3 return within the stipulated period, and the principles established by higher judicial authorities regarding self-assessment and refund claims. The tribunal upheld the lower authorities' decisions, emphasizing the necessity of following prescribed procedures and the doctrine of unjust enrichment.