2019 (12) TMI 942 - AT - Service Tax

Refund of service tax - job-work - price escalation clause - Section 11B of Central Excise Act, 1944 - It was the case of the appellant that due to increase in the cost of packaging they raised supplementary invoices dt. 31.3.2016, 30.6.2016 and 30.9.2016 on the customer M/s.TSL towards differential value and taxable service and had paid service on such charges - burden of duty incidence to another person passed on not - principles of unjust enrichment. HELD THAT - The appellant was given date for personal hearing. Later as there was no representation the matter was decided exparte. In appeal, the Commissioner (Appeals) has considered the issue on merits and thereafter rejected the refund claim. However, it is contented by the appellants that they had furnished Chartered Account certificate before the Commissioner (Appeals) to adjudge the issue of not having passed on the burden of duty incidence to another person and also that they have paid excess amount in terms of packaging charges. Commissioner (Appeals) has not considered the Chartered Accountant certificate alleged to be produced by the appellant. Without such documents the issue of unjust enrichment cannot be decided - matter remanded to the original authority who shall consider the refund claim afresh after taking cognisance of all the documents produced by the appellant. The appeal is allowed by way of remand to the original authority.

Summary

Issues:
Refund claim under Section 11B of Central Excise Act, rejection of refund claim by original authority and Commissioner (Appeals), consideration of Chartered Accountant certificate, unjust enrichment, remand to original authority for fresh consideration.

Analysis:
The case involved the appellant, registered for providing Business Auxiliary Service, engaged in processing iron and steel sheets on job work basis to M/s.Tata Steel Ltd. The appellant availed a refund claim of &8377; 59,05,952/- under Section 11B of the Central Excise Act, 1944, due to an increase in packaging costs. The customer, M/s.Tata Steel Ltd., rejected the request for payment of increased charges raised in supplementary invoices. The appellant informed the department of availing credit for excess amounts paid as service tax and other applicable cess, filing a refund claim as a precaution against potential rejection by the department. The original authority and Commissioner (Appeals) rejected the refund claim, leading to the current appeal.

The appellant, through their counsel, submitted in the appeal that they were focusing the refund contest on one invoice amounting to &8377; 47,21,090/-, while giving up the contest for the other two invoices as those amounts had already been adjusted against future credit of the customer. The counsel highlighted that during the adjudication before the original authority, the consultant could not appear for personal hearing due to personal inconvenience, resulting in an ex-parte decision. The appellant had submitted a Chartered Accountant certificate to support their refund claim, emphasizing that it demonstrated the appellant had not passed on the duty burden to another person. The counsel requested a remand to the Commissioner (Appeals) for considering the documents produced by the appellant.

The Assistant Commissioner (Appeals) supported the findings of the impugned order, stating that the rejection of the refund claim was based on the examination of the worksheets submitted by the appellant. The Assistant Commissioner (Appeals) contended that there was no ground to interfere with the impugned order. Upon hearing both sides, the Hon'ble Member (Judicial) reviewed the original authority's order and noted that while the Commissioner (Appeals) had considered the issue on merits, the Chartered Accountant certificate provided by the appellant was not taken into account. Recognizing the importance of this document in deciding the issue of unjust enrichment, the matter was deemed fit for remand to the original authority for a fresh consideration, ensuring all documents produced by the appellant are duly considered. The appellant was directed to be given a personal hearing and sufficient opportunity to present additional evidence, if any.

In conclusion, the impugned order was set aside, and the appeal was allowed by way of remand to the original authority for a reevaluation of the refund claim in light of all documents provided by the appellant, emphasizing the need for a fair consideration of the Chartered Accountant certificate and ensuring due process in the proceedings.