2024 (10) TMI 451 - AT - Service Tax

Recovery of Refund of service tax allowed in respect of Work Contract Services provided to PWD, the Government Organization - unjust enrichment - exemption under mega exemption N/N. 25/2012 dated 20.06.2012 - HELD THAT - It has now been brought to notice that the previous Order in Appeal dated 30.08.2017 was earlier challenged by the appellant before this Tribunal and the said order stands set aside vide Tribunal final order no. 51682/2023 dated 22.12.2023. Consequent thereof the O-I-O dated 07.10.2016 which sanctioned the refund gets revived. The present show cause notice was issued consequent to the order in appeal dt. 30.08.2017 which is not in existence in view of the said final order of this Tribunal dated 22.12.2023. Thus very basis for impugned SCN has been set aside this Tribunal has already held appellant eligible for refund of amount in question - Nothing is brought to notice by the department about appeal, if any, as would have been filed by the department against the said final order dated 22.12.2023. The order arising out of present show cause notice i.e the order under the challenge (O-I-A dated 21.06.2018 ) Is hereby, is also not sustainable - Appeal allowed.

Summary

Issues:
Refund claim for service tax paid on work contract services, unjust enrichment principle, recovery of erroneously refunded amount, entitlement to exemption under mega exemption notifications, validity of show cause notice, appeal against order in original.

Analysis:
The appellant filed a refund claim for service tax paid on work contract services provided to a government organization covered under special exemption provisions. The claim was initially sanctioned but later reviewed on the ground of unjust enrichment. The Commissioner (Appeals) set aside the original order, stating the amount was recoverable from the appellant. A show cause notice was issued proposing recovery and crediting to the Consumer Welfare fund. The subsequent appeal against this order was rejected, leading to the appellant approaching the tribunal.

The appellant argued for exemption under mega exemption notifications due to executing works for state and central government bodies. They claimed the service tax was paid inadvertently and sought a refund. The appeal was allowed, setting aside the previous order. The appellant contended that the show cause notice issued based on the earlier order was no longer valid, and any recovery proposed should be set aside.

The Authorized Representative supported the Commissioner (Appeals) findings, stating the appellant was not entitled to a refund due to unjust enrichment. The appeal was urged to be dismissed based on these grounds.

The tribunal observed that the refund claim was initially sanctioned but later ordered for recovery based on unjust enrichment grounds. However, the previous order of the tribunal had set aside the Commissioner (Appeals) order, thereby reviving the original refund sanction order. As the show cause notice was based on the now-invalid order, the tribunal held the recovery proposal unsustainable and allowed the appeal.

In conclusion, the tribunal set aside the order under challenge, as the basis for the show cause notice had been invalidated by the previous tribunal order. The appellant was deemed eligible for the refund amount in question, and the appeal was allowed.