2016 (10) TMI 308 - AT - Service Tax

Refund claim - Unjust enrichment - Service recipient has reversed the cevnat credit subsequently after availing the same - copies of ledger produced - service tax was on security services provided to school / education institution - Notification No. 25/2012-S.T., dated 20th June, 2012 - Held that - the appellant had produced the ledgers maintained by the recipient of services, M/s. Ashok Hall Girl s Residential School vide the entry dated 28-3-2014 in the ledger, which clearly records debit of ₹ 2,48,600/- earlier credited to the appellant towards Service Tax. Thus the component of Service Tax earlier borne by the service recipient and passed on by the appellant, stood reversed by the school and stood debited from the consideration due to the appellant from the school. In the circumstances, the appellant is seen to have clearly established that there is no unjust enrichment. Since unjust enrichment was the sole ground for denial of refund and that is not found to exist in the facts and circumstances of this case, the appellant is entitled to refund. - Decided in favour of appellant

Summary

Issues:
Claim for refund of Service Tax based on unjust enrichment grounds.

Analysis:
The appellant, a security service provider to an educational institution, claimed a refund of Service Tax collected from the recipient school based on a Circular by the Central Board of Excise and Customs. The appellant submitted evidence of the recipient school reversing the Service Tax component in their ledger, seeking a refund of Rs. 2,48,600. The primary authority rejected the claim solely on unjust enrichment grounds, despite the appellant providing ledger accounts during the appeal process.

The judgment highlighted the burden of proof on the assessee regarding unjust enrichment, citing Section 12B of the Central Excise Act, 1944. The Court emphasized that this presumption could be rebutted with substantial evidence showing no enrichment for claiming a refund. In this case, the appellant successfully demonstrated through the recipient school's ledger entry that the Service Tax component was reversed and debited from the consideration due to the appellant, proving no unjust enrichment.

Consequently, the Tribunal allowed the appeal, quashed the impugned order, and directed the refund of Rs. 2,48,600 to the appellant promptly. The decision was based on the appellant's ability to establish the absence of unjust enrichment, the sole ground for denying the refund, thus entitling them to the refund amount claimed.