2018 (2) TMI 401 - AT - Service Tax

Refund of service tax paid mistakenly - main ground for rejection of the entire refund claim is that the appellants have not furnished sufficient documents to establish that the incidence of duty has not been passed on to another - Held that - we may deem it fit to remand the matter to the original authority to consider the issue of unjust enrichment. The adjudicating authority shall give the appellants a chance of personal hearing as well as sufficient time to produce documents. Time limitation - Held that - as per mandate of Constitution no tax can be levied or collected without the authority of law and since the Commissioner (Appeals) has held that appellants are not liable to pay tax, the payment having been made under mistake, the refund claim is not barred by limitation. Appeal allowed by way of remand.

Summary

Issues:
1. Refund claim filed under the wrong category of service tax.
2. Rejection of refund claim on the grounds of unjust enrichment and limitation.
3. Appeal for a chance to prove non-collection of tax from customers.
4. Need for sufficient documents to establish non-passing on of duty incidence.
5. Consideration of unjust enrichment issue.
6. Applicability of limitation in case of tax payment made under mistake.

Analysis:
1. The appellants filed a refund claim for service tax paid mistakenly under "Survey and Exploration of Minerals Services." The original authority deemed the activities taxable under section 65(105)(zzzy) of the Finance Act, 1994. The Commissioner (Appeals) rejected the refund claim as time-barred and due to unjust enrichment. The appellants appealed to the Tribunal.

2. The appellant argued that the service tax was paid based on incorrect advice. The refund claim rejection was based on unjust enrichment. The appellant requested a chance to prove non-collection of tax from customers with documentary evidence.

3. The main ground for refund claim rejection was the lack of documents to prove non-passing on of duty incidence. The Tribunal noted the necessity to consider the issue of unjust enrichment while adjudicating a refund application. The matter was remanded to the original authority for further review.

4. The appellants contended that the refund claim was not time-barred as the tax was paid mistakenly. Citing legal precedents, including a decision by the Bombay High Court, the Tribunal discussed the applicability of limitation in cases of tax payment made under a mistake of law.

5. The Tribunal referenced a decision by the Madras High Court to support the rejection of the claim as time-barred. However, regarding the issue of unjust enrichment, the Tribunal set aside the finding and remanded it for further consideration by the adjudicating authority.

6. After thorough analysis and discussion, the Tribunal allowed the appeal by way of remand, emphasizing the need to provide the appellant with an opportunity to establish that the duty incidence was not passed on. The judgment was dictated and pronounced in open court.