2014 (5) TMI 617 - AT - Service Tax

Demand of service tax - Management or Business Consultant - Merger and acquisition services - import of services - reverse charge - Held that - observations of the adjudicating authority are in the nature of assumption and presumption and not based upon any evidence on record to show that the appellant had received services of Mergers and Acquisitions from Amsterdam Company. Admittedly, if the services have not been received and the payment made for the said services had been adjusted between the Indian and Amsterdam Company, the said corresponding value of the services would not be liable to Service Tax Matter remanded back to lower authorities to find out the factual position as to whether the services were received by the appellant or not. If services were actually not received, the refund of the Service tax being paid by the appellant is to be refunded to them without raising the issue of unjust enrichment inasmuch as it is the tax deposited by the appellant himself which is being sought to be refunded. - Decided in favour of assessee.

Summary

Issues:
Refund claim for excess payment of Service Tax under 'Management or Business Consultant' service received from abroad. Dispute over Mergers and Acquisitions charges. Applicability of Service Tax under reverse charge mechanism. Unjust enrichment and factual determination of services received.

Analysis:
The appellant, registered for various services, filed a refund claim for excess Service Tax payment for the period October 2009 to March 2010. The claim was based on receiving 'Management or Business Consultant' services from M/s. Wolters Kluwer NV, Amsterdam, under a reverse charge mechanism. The appellant paid the invoiced amount and Service Tax, including disputed Mergers and Acquisitions charges. Subsequently, negotiations led to a credit note from M/s. Wolters Kluwer NV, Amsterdam, refunding a portion of the charges.

The original adjudicating authority and Commissioner (Appeals) ruled against the appellant, citing financial adjustments between corporate entities as an afterthought. However, the Commissioner (Appeals) noted the lack of evidence showing the appellant received the Mergers and Acquisitions services. The judgment referenced a similar case, M/s. Radico Khaitan Ltd., where the Tribunal ruled in favor of the assessee when services were not received.

Ultimately, the judgment set aside the impugned order and remanded the matter to determine if the appellant actually received the services. If services were not received, the refund of Service Tax should be granted without raising the issue of unjust enrichment, as it was the appellant's own tax deposit seeking a refund. The appeal was allowed by way of remand for further factual investigation.

In conclusion, the judgment focused on the necessity of factual evidence to determine service receipt for Service Tax refund claims, emphasizing the absence of services rendered as a crucial factor in refund eligibility.