2018 (8) TMI 811 - AT - Service Tax

Refund of Service Tax paid - denial on the ground of unjust enrichment - bottling of alcoholic liquor conceived as Business Auxiliary Services and tax was erroneously paid - section 11B of the Central Excise Act - Held that - The said certificate dated 09.12.2017 was not before the authorities below and as such does not stand considered by them. Inasmuch as the said certificate is an important document, the appellant should be given an opportunity to place the same before the lower authorities and to re-decide the issue by taking the said certificate into consideration - appeal allowed by wya of remand.

Summary

Issues:
Refund of Service Tax under Business Auxiliary Services; Unjust Enrichment; Interpretation of 'buyer' in section 11B(2) of Central Excise Act.

Analysis:
The appellant, engaged in manufacturing alcoholic liquor and providing bottling services, initially paid Service Tax for the period November 2013 to July 2014. Subsequently, realizing the exemption of bottling services during that period, they filed refund claims in October 2015. The lower authorities accepted the refund on merits but rejected it citing unjust enrichment. The Commissioner (Appeals) modified the order, directing the refund amounts to be credited to the Consumer Welfare Fund, based on the interpretation of 'buyer' in section 11B(2) of the Central Excise Act.

In the judgment, the Commissioner (Appeals) referred to a Supreme Court decision, clarifying that the term 'buyer' in the proviso to section 11B(2) should not be limited to the first buyer from the manufacturer. Despite the appellant's argument that Service Tax was separately charged and refunded to the customer, there was no evidence that the tax was not ultimately collected from the buyer, leading to the rejection of the refund claim on the grounds of unjust enrichment.

The appellant's advocate highlighted that the Service Tax was clearly shown separately in invoices and refunded to the customer, M/s. United Spirits, with a certificate stating that the tax was not collected from the customers. The advocate also cited a Tribunal decision supporting the appellant's position. The Tribunal member acknowledged the importance of the certificate, which was not considered by the lower authorities. Consequently, the matter was remanded to the original adjudicating authority for a fresh decision, considering all relevant evidence and circumstances, allowing the appellant to present the certificate and contest the Revenue's position with appropriate evidence.

In conclusion, both appeals were allowed by way of remand, emphasizing the need for a comprehensive reconsideration of the unjust enrichment issue in light of the new evidence presented by the appellant.