2009 (11) TMI 215 - AT - Service Tax

Refund claim- The assessee filed a refund claim under section 11B stating that it was the SEBI registered sub-broker and it did not come under the purview of service tax. The adjudicating authority sanctioned the refund. On revision commissioner set aside order in original on the ground that the adjudicating authority had sanctioned refund to the assessee incorrectly. Held that-There is no contrary evidence produced by the revenue to indicate that the findings of the adjudicating authority and the verifications are incorrect. In the absence of any contrary evidence, we find that the impugned order before us is incorrect and is not sustainable. The impugned order is set aside and appeal allowed with consequential relief if any.

Summary

Issues: Refund claim under section 11B of Central Excise Act, 1944 for Service Tax paid by SEBI registered sub-broker; Burden of proof on passing incidence of tax to customers for refund eligibility; Application of doctrine of unjust enrichment.

Refund Claim Analysis:
The appeal involved a refund claim filed by the assessees for Service Tax paid amounting to Rs. 1,18,762 for the period from 1-4-2003 to 31-3-2004. The assessees, claiming to be SEBI registered sub-brokers, sought refund based on the definitions of "Stock-broker" and "Taxable Service" under the Finance Act, 1994. The refund was initially sanctioned after verification, but the Commissioner of Central Excise reviewed the order and set it aside under section 84 of the Finance Act, leading to the appeal.

Burden of Proof and Unjust Enrichment Analysis:
The key contention revolved around the burden of proof on the assessees to demonstrate that the incidence of tax had not been passed on to customers, a prerequisite for refund eligibility under section 11D of the Central Excise Act, 1944. The reviewing authority emphasized that the assessees failed to conclusively prove the non-passing of tax incidence to customers, thereby invoking the doctrine of unjust enrichment. The reviewing authority highlighted the necessity for the assessees to show that taxes paid were not collected from customers, which they allegedly failed to do during the proceedings.

Judicial Findings and Conclusion:
Upon careful consideration of submissions and records, the Appellate Tribunal observed discrepancies between the reviewing authority's remarks and the adjudicating authority's findings. While the reviewing authority focused on the non-passing of tax incidence, the adjudicating authority had scrutinized the refund claim thoroughly, finding the assessees had provided all necessary evidence. The lower authorities verified the claim, confirming that the tax had not been passed on by the assessees. In the absence of contradictory evidence from the revenue, the Tribunal deemed the reviewing authority's decision incorrect and unsustainable. Consequently, the impugned order was set aside, and the appeal was allowed with any consequential relief.

This detailed analysis of the judgment provides a comprehensive understanding of the issues, legal principles, and the Tribunal's decision, ensuring clarity and insight into the case's intricacies.