2016 (11) TMI 835 - AT - Service Tax

Refund - Business Support Services - unjust enrichment - Held that - the Ld. Counsel has taken me to various documents such as trial balance, annual report for 2006-07 & 2007-08 and schedule thereof wherefrom it is clearly observed that the amount of service tax paid in excess has been shown as receivable under the head of Loans and Advances - In my view, this is more than sufficient to show that incidence of excess paid service tax was not passed on to any other person - Decided in favor of the assessee by way of remand.

Summary

Issues:
Refund claim rejection based on unjust enrichment, verification of documents for refund amount, admissibility of input services for refund, cenvat credit availed before service tax registration, jurisdictional scope of show cause notice.

Analysis:
The appeal challenged the rejection of a refund claim for excess service tax paid during a specific period. The appellant, engaged in Business Support Services, filed a refund claim for ?1,49,451, out of which ?64,220 was sanctioned but transferred to the Consumer Welfare Fund. The remaining ?85,231 was rejected due to Cenvat Credit availed before obtaining service tax registration. The Commissioner (Appeals) upheld the rejection but directed verification of the input services for the ?85,231 refund. The appellant contended that the incidence of excess service tax was not passed on to others, supported by documents showing the amount as 'receivable' in annual reports and issuance of credit notes for excess charges.

The Assistant Commissioner argued that the appellant failed to provide sufficient documentation to prove non-passing of incidence, leading to the unjust enrichment conclusion by both lower authorities. The Tribunal analyzed the documents, including trial balance and annual reports, which clearly indicated the excess service tax as 'receivable' under 'Loans and Advances,' showing non-recovery from service recipients. The Tribunal found the lower authorities did not adequately verify the documents. The Commissioner's scrutiny of input services' admissibility and the timing of cenvat credit availed before service tax registration were also addressed.

The Tribunal concluded that the appellant's documentation sufficiently proved the non-passing of excess service tax incidence. It criticized the lower authorities for not properly examining the evidence submitted. The Commissioner's decision to delve into input services' admissibility beyond the show cause notice's scope was deemed unwarranted. The Tribunal directed the adjudicating authority to verify the annual reports for the relevant years, emphasizing the importance of bookkeeping over the C.A. certificate. Consequently, the impugned order was set aside, and the appeal allowed for remand based on the above considerations.