2017 (8) TMI 398 - AT - Service Tax

Levy of service tax - auction proceeds of abandoned goods - time limitation - Held that - the limitation needs to be counted from the date of the decision of the appellate Tribunal in terms of Section 11B of the Central Excise Act, 1944 made applicable to the Finance Act, 1994 by Section 83 thereof. However, it is seen that the matter before Tribunal related to demand for the period 2004 to 2009 and, therefore, only the said period can be considered for the purpose of refund. Unjust enrichment - Held that - It is seen that even at the appellate stage, no such certificate has been produced before the Tribunal. In these circumstances, we find that though clause of limitation under Section 11B would not be applicable in respect of the amounts covered by the demand show-cause notice issued to the appellant and dropped subsequently by the Commissioner as well as by the Tribunal, however, in view of the failure of the appellant to establish that they have not passed on burden of any other person, the said amount would have to be transferred to the Consumer Welfare Fund. Appeal disposed off - decided partly in favor of appellant.

Summary

Issues Involved:
Denial of refund claim based on limitation and unjust enrichment.

Analysis:
1. The case involved an appeal by M/s Central Warehousing Corporation against the denial of a refund claim related to the auction proceeds of abandoned goods. The appellants argued that the payments made during the investigation period were under protest, citing legal precedents to support their claim.

2. The issue of limitation under Section 11B was a crucial aspect of the case. The Commissioner invoked the limitation and rejected a major part of the refund claim as time-barred. The Commissioner's order was challenged on the grounds that it did not fall under the category of a judgment or direction of an appellate authority, tribunal, or court. The Tribunal had previously ruled in favor of the appellant regarding the leviability of Service Tax on auction proceeds, settling the issue. However, the limitation needed to be counted from the date of the Tribunal's decision for the relevant period.

3. The doctrine of unjust enrichment was another key issue. The appellant claimed that they had not passed on the burden of Service Tax to their customers and had not charged Service Tax on the auction proceeds. However, the Tribunal noted the absence of a Chartered Accountant certificate to verify this claim. As a result, the Tribunal held that the burden had been passed on to customers, leading to the transfer of the amount to the Consumer Welfare Fund.

4. Ultimately, the appeal was disposed of based on the settlement of the leviability issue, the application of limitation, and the determination of unjust enrichment. The decision was pronounced on 27.07.2017 by the Tribunal, comprising Member (Judicial) and Member (Technical), with legal representatives for both parties presenting their arguments during the proceedings.