2024 (3) TMI 1042 - AT - Service Tax

Rejection of refund claim on the ground of unjust enrichment - amount has been rightly credited to the Consumer Welfare Fund or not - Section 11 B of the Central Excise Act, 1944 - HELD THAT - The reasons for rejecting is that in terms of Section 11B of the Act, 1944, the appellant was required to submit such documentary or other evidences so as to establish that the amount of duty and interest, if any, and the incidence of such duty had not been passed on by him to any other person - Both, the Adjudicating Authority and the Appellate Authority had specifically noted that either the appellant had not produced the documents or had only submitted the photocopies of the Ledger Account and invoices. The refund claim filed by the appellant includes the amount of Rs.7,24,463/- excess paid under the category of Management, Maintenance Repair Services . As the refund claim is found to be hit by unjust enrichment clause for want of requisite documents, an opportunity may be granted to the appellant to produce the documents and other evidences proving that the incidence of duty has not been passed on either directly or indirectly to the service receiver. The matter is remanded to the Adjudicating Authority, granting liberty to the appellant to substantiate that the claim is not hit by unjust enrichment in the light of the documents produced - Appeal allowed by way of remand.

Summary

Issues: Refund claim rejection on grounds of unjust enrichment u/s 11B of Central Excise Act, 1944.

Summary:
The appellant challenged the rejection of the refund claim based on unjust enrichment u/s 11B of the Central Excise Act, 1944. The appellant provided services under various categories to PHED and others during 2004-2005 to 2008-2009. A show cause notice was issued for recovery of service tax, which was confirmed by the Adjudicating Authority. The Commissioner (Appeals) confirmed part of the demand and set aside the rest. The appellant then filed a refund claim, which was partially sanctioned, with the remaining amount directed to be credited to the Consumer Welfare Fund due to unjust enrichment. The appeal against this decision was rejected, leading to the current appeal before the Tribunal.

The main issue is whether the refund claim was rightfully credited to the Consumer Welfare Fund based on unjust enrichment. The Authorities noted that the appellant failed to provide sufficient evidence to show that the duty incidence was not passed on to others. The appellant only submitted photocopies of documents, which were deemed insufficient. The Adjudicating Authority highlighted the lack of original invoices and ledgers for certain transactions, indicating that the burden of service tax may have been passed on. As a result, the refund claim was found to be hit by the unjust enrichment clause.

The Tribunal decided to remand the matter back to the Adjudicating Authority, allowing the appellant an opportunity to produce additional documents and evidence to prove that the duty incidence was not passed on to the service receiver. The appeal was allowed by way of remand, providing the appellant with a chance to substantiate their claim in light of the documents presented.

[Order pronounced on 21st March, 2024]