2008 (3) TMI 94 - AT - Service Tax

Refund claim on the ground that they have paid service tax twice - It was pleaded that the main Stock Broker has already paid the service tax and the assessee being a sub-broker had inadvertently paid the tax assuming that their commission received from the main broker also attracts service tax refund is admissible, if main stock broker has paid tax, then sub-broker is not liable to pay tax refund allowed subjected to that incidence of duty has not been passed matter remanded

Summary

Issues:
Refund claim rejection based on double payment of service tax by sub-broker, unjust enrichment examination, evidence of main Stock Broker's tax discharge.

Analysis:
1. The appeal was against the rejection of a refund claim amounting to Rs. 32,376 by the Assistant Commissioner of Central Excise, Dharwad Division. The appellants, sub-brokers, claimed they paid service tax twice unintentionally for the period from 10-9-2004 to 31-3-2005. They argued that the main Stock Broker had already paid the tax, and they mistakenly paid assuming their commission was taxable. Both authorities rejected the claim, stating the sub-broker's payment was lawful. The counsel cited precedents where sub-brokers were not liable if the main broker paid the tax, emphasizing no unjust enrichment as the tax wasn't passed on to customers.

2. The Departmental Representative opposed, citing lack of unjust enrichment examination and absence of evidence proving the main Stock Broker discharged the tax liability. In response, the appellants' counsel asserted evidence was submitted to both authorities from the main Stock Broker and themselves regarding tax payment, eliminating the need for further review on this aspect.

3. After reviewing submissions and relevant judgments, the Member concluded that when the main Stock Broker discharged the service tax, the sub-broker wasn't liable to pay. The appellants provided TR 6 Challan and payment details from the main Stock Broker, M/s. Asit C. Mehta Investment Intermediates Ltd., Mumbai, confirming tax discharge. Citing the precedent, the Member ruled in favor of the appellants on merit, absolving them from the tax liability.

4. However, the issue of unjust enrichment remained unaddressed by both authorities. Consequently, the case was remanded to the original authority for examination on whether the sub-broker passed on the tax liability to customers. The original authority was instructed to resolve the matter within two months from receiving the order, ensuring compliance with the law.

This detailed analysis highlights the key legal arguments, evidence presentation, precedents relied upon, and the final decision, providing a comprehensive overview of the judgment's nuances and implications.