2025 (1) TMI 787 - AT - Service Tax

Refund of service tax paid - rejection on the ground that appellant has failed to pass the bar of unjust engagement - HELD THAT - As it is evident from the record that service recipient has not remitted any Service Tax towards the services rendered by the appellant. In that circumstances the appellant has passed the bar of unjust engagement, therefore, bar of unjust engagement is not applicable to the facts of this case. Larger Bench of this Tribunal in the case of M/S VIAVI SOLUTIONS INDIA PVT. LTD. VERSUS THE COMMISSIONER OF CGST, GURGAON-I 2024 (6) TMI 187 - CESTAT CHANDIGARH wherein it has been held that in case of refund claims filed under Service Tax laws, the decision of ITC LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, KOLKATA -IV 2019 (9) TMI 802 - SUPREME COURT (LB) is not applicable as the same is related with the cases of Customs. In that circumstances the decision of ITC Ltd. is not applicable to the facts of the case. The appellant is entitled to claim the refunds - Appeal allowed.

Summary

The judgment from the Appellate Tribunal CESTAT Kolkata, presided over by Shri Ashok Jindal, addresses two appeals involving a common issue concerning the appellant, a provider of operational and maintenance services to the Railways. The appellant had inadvertently paid service tax on services that were exempt from such tax. The service recipient, the Railways, did not remit the service tax to the appellant, as confirmed by a Chartered Accountant's certificate.

The appellant's refund claims were initially rejected on the grounds of failing to pass the "bar of unjust enrichment" and due to a precedent set by the Hon'ble Apex Court in ITC Ltd. v. Commissioner of Central Excise, Kolkata-IV, which was cited as a reason for the claims' non-maintainability.

Upon review, the Tribunal determined that the appellant had indeed passed the bar of unjust enrichment since the service recipient did not pay the service tax. Furthermore, the Tribunal found that the ITC Ltd. decision was not applicable to this case, as clarified by a Larger Bench in M/s. Viavi Solutions India Pvt. Ltd. v. Commissioner of CGST, Gurgaon-I, which distinguished between refund claims under Service Tax laws and Customs cases.

Consequently, the Tribunal set aside the impugned orders, allowing the appeals and granting the appellant the right to claim refunds with any consequential relief.