2016 (11) TMI 705 - AT - Service Tax

Refund claim - unjust enrichment - Held that - refund claim was sanctioned by the Ld. Commissioner (Appeals) not only based on the certificate issued by the Chartered Accountant but also on verification of books of accounts namely profit and loss account, balance sheet and the agreements entered into between the Respondents and the buyers. Hence, we are of the view that the doctrine of unjust enrichment will have no application and the respondent should be eligible for the refund claim. Therefore, we do not find any infirmity in the impugned order - appeal dismissed - decided against Revenue.

Summary

Issues:
Unjust enrichment aspect in refund claim

Analysis:
The appeal was against an order passed by the Commissioner (Appeals) regarding the unjust enrichment aspect in a refund claim. The Revenue contended that the Ld. Commissioner did not properly address the unjust enrichment issue. The Ld. Commissioner extensively discussed the matter, considering the evidence presented by the appellant and respondent. The respondent provided a certificate stating they paid the service tax from their own funds and did not pass on the burden to customers. Additionally, a Chartered Accountant certified the same, after verifying the books of accounts. The Ld. Commissioner, after examining the balance sheet, profit and loss account, and agreements, concluded that the respondent was eligible for the refund claim as the doctrine of unjust enrichment did not apply. The Tribunal upheld the Ld. Commissioner's decision, stating that the refund claim was supported by sufficient evidence to show that the tax paid was deducted from the profit, and the respondent did not pass on the burden to customers. Consequently, the appeal by the Revenue was dismissed.

This case highlights the importance of providing substantial evidence to support refund claims and the doctrine of unjust enrichment. The decision emphasizes the significance of documentation, such as certificates from Chartered Accountants, balance sheets, and agreements, to demonstrate that the tax burden was not transferred to customers. The judgment underscores the need for a thorough examination of financial records and agreements to determine the eligibility for refund claims and the applicability of the unjust enrichment principle.