2019 (6) TMI 634 - AT - Service Tax

Refund of service tax paid - Manpower Supply Services - period from 2003 to 2008 - unjust enrichment - HELD THAT - Admittedly, as apparent from record, no document was produced before the adjudicating authority and Commissioner (appeals) to justify non-applicability of doctrine of unjust enrichment to the appellant but submission of CA Certificate and Balance Sheet of company during hearing of the appeal, which is not objected by the Respondent Department, the same can be taken as additional evidence as per rule 23 to CESTATE procedure Rules 1982 - Cursory reading of the documentary evidence would reveal that incidence of tax has not been passed on by the Appellant to any other person. Refund allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
Rejection of refund claim on Service Tax for Manpower Supply Services; Interpretation of limitation period for refund under section 11B of Central Excise Act 1944; Application of doctrine of unjust enrichment; Admissibility of additional evidence in the form of CA Certificate and Balance Sheet.

Analysis:
The case involved the rejection of a refund claim on Service Tax paid towards Manpower Supply Services during the period from 2003 to 2008. The investigation revealed discrepancies in the payment of Service Tax under different categories. The Appellant challenged the duty demand, interest, and penalty confirmed by the authorities. The CESTAT, in a previous order, set aside the views of the lower authorities regarding the nature of the Appellant's activity falling under 'manpower, recruitment, and supply agency.' Subsequently, the Appellant filed a refund claim, which was rejected again, leading to the appeal before the Tribunal.

The primary grounds for rejecting the refund claim were threefold. Firstly, the Commissioner held that the payment made by the Appellant in 2007-2008 was beyond the limitation period for refund under section 11B of the Central Excise Act 1944. Secondly, it was argued that the payment was established through a TRC Challan, and thus, could not be claimed as a deposit. Thirdly, the issue of unjust enrichment was not adequately addressed in the previous orders, as per section 11B(1).

During the hearing, the Appellant's Counsel provided a detailed explanation regarding the calculation of the refund claim and submitted a CA Certificate and Balance Sheet to support the non-applicability of the doctrine of unjust enrichment. The Respondent's Authorized Representative cited judicial decisions to emphasize compliance with section 11B for refund eligibility. However, the Tribunal referred to a previous judgment in the case of CCE v. Clariant (I) Ltd., highlighting that a refund could be sought even if the payment was voluntary, provided the application was made within the specified period.

Despite the lack of initial documentation justifying the non-applicability of unjust enrichment, the submission of additional evidence during the appeal, supported by the CA Certificate and Balance Sheet, was deemed admissible as per CESTAT procedure rules. The Tribunal concluded that the tax incidence was not passed on by the Appellant, making the refund admissible as a consequence of the Tribunal's judgment. Consequently, the appeal was allowed, the earlier order was set aside, and the Appellant was granted a refund of the disputed amount with applicable interest, to be paid by the Respondent Department within three months of the order.

In conclusion, the judgment addressed the issues of limitation period for refund, application of unjust enrichment, and the admissibility of additional evidence, providing a detailed analysis of each aspect to arrive at a favorable decision for the Appellant.