2015 (5) TMI 33 - AT - Service Tax

Denial of refund claim of excess service tax paid - goods transport agency services - Bar of limitation and unjust enrichment - Held that - rejection of refund claim by Ld. Commissioner on account of unjust enrichment, the order of review is not sustainable in the eyes of law as held by Hon ble High Court of Rajasthan in the case of Inani Carriers (2008 (11) TMI 79 - RAJASTHAN HIGH COURT ) wherein the Hon ble High Court has held that the superior jurisdiction was capable of reversing, modifying or affirming the order which was not issued before it and in the present case Ld. Commissioner (A) has declined to modify or simply affirm the order. As per notification no.32/2004 the appellant was not required to pay Service Tax at all when there is no liability for the appellant to pay Service Tax. Therefore, the provision of section 11(B) of the Act are not applicable to this case as held by this Tribunal in the case of Jubilant Enterprises Pvt. Ltd. (2014 (6) TMI 425 - CESTAT MUMBAI). Therefore, I hold that bar of limitation is not applicable to the facts of this case. Consequently, the order of rejection of refund claim on the ground of limitation is set aside. - decided in favour of assessee.

Summary

Issues:
1. Denial of refund claim of excess service tax paid on goods transport agency services.
2. Grounds for denial: (i) Limitation (ii) Unjust enrichment.

Analysis:
1. The appellant filed refund claims for excess service tax paid on transportation services between 01.01.2005-31.05.2007, but faced denial based on limitation and unjust enrichment grounds. The adjudicating authority initially allowed a refund but rejected a portion as time-barred. The appellant appealed, challenging the rejection based on limitation.

2. The Commissioner reviewed the orders, sanctioning one refund claim but rejecting another. The appellant contested the rejection on unjust enrichment, citing legal precedents. They argued that the Commissioner's review disregarded crucial evidence proving no unjust enrichment, necessitating the order's reversal.

3. Regarding the second appeal against the rejection based on limitation, the appellant argued that the service tax was not payable due to a specific notification, making the limitation provision inapplicable. They relied on tribunal decisions to support their stance, seeking the reversal of the rejection order.

4. The Assistant Commissioner contended that all refunds are subject to the limitation period under section 11(B) of the Act, and since the claim exceeded the prescribed timeframe, it was rightfully denied on this ground.

5. The Tribunal, after considering arguments from both sides, found the Commissioner's rejection on unjust enrichment unsustainable in law. Citing legal precedents, the Tribunal emphasized the need for proper consideration of evidence related to unjust enrichment before rejecting a refund claim. Consequently, the order rejecting a portion of the refund claim was set aside, allowing a refund of &8377; 7,94,490.

6. In the appeal concerning the limitation issue, the Tribunal ruled in favor of the appellant, stating that the service tax was not applicable as per a specific notification, rendering the limitation provision irrelevant. Relying on tribunal decisions, the Tribunal held that the appellant was entitled to the refund of &8377; 8,26,637, setting aside the rejection based on limitation.

7. The Tribunal allowed both appeals, providing consequential relief to the appellant, emphasizing the importance of proper consideration of unjust enrichment and the applicability of tax provisions in determining refund claims.