2020 (12) TMI 150 - AT - Service Tax

Refund of Service tax - Rejection on the ground of time limitation - HELD THAT - In this case, it an admitted position that in the earlier round of litigation this Tribunal has held that the refund claim is not barred by limitation and the order of the Ld. Commissioner (Appeals) dated 12.03.2019 passed in earlier round of litigation was upheld by dismissing the appeal filed by the Revenue under the litigation policy. The Revenue came with an application for rectification of mistake on the ground that the appeal cannot be dismissed under litigation policy as it involves a substantial question of law, therefore, the order dated 20.11.2019 be recalled. The said application for rectification of mistake has been dismissed. Time Limitation - HELD THAT - As the issue has been settled that in such a cases, the refund claim is to be given directly to the service recipient i.e Garrison Engineers (MES), therefore, the refund claim is allowed along with interest after three months from the date of filing the refund claim till its realization as held by the Hon ble Apex Court in the case of Ranbaxy Laboratories Ltd. Vs. Union of India 2011 (10) TMI 16 - SUPREME COURT . Appeal allowed - decided in favor of appellant.

Summary

Issues:
Refund claim rejection, unjust enrichment, transfer to Consumer Welfare Fund, appeal dismissal, rectification of mistake, substantial question of law, refund to service recipient directly, interest on refund.

Refund Claim Rejection:
The appellant appealed against the rejection of the refund claim of ?36,24,372, related to service tax paid for works contract services provided for construction of non-commercial buildings to Garrison Engineers (MES). The service was initially exempted but later became taxable, then exempted again retrospectively. The appellant filed the refund claim for the period March 2015 to December 2015. The Ld. Commissioner (Appeal) allowed a part of the claim and rejected a portion as time-barred. The Tribunal allowed the appellant's appeal, holding the refund claim cannot be time-barred.

Unjust Enrichment and Transfer to Consumer Welfare Fund:
The adjudicating authority transferred the entire refund amount to the Consumer Welfare Fund, citing unjust enrichment. The appellant argued that the refund should be directly transferred to Garrison Engineers (MES) as directed in the earlier round of litigation. The Ld. Commissioner (Appeals) upheld the transfer to the Consumer Welfare Fund, leading to the current appeal.

Appeal Dismissal and Rectification of Mistake:
The Revenue's appeal against the refund claim sanction was dismissed by the Tribunal under the litigation policy. An application for rectification of mistake was filed by the Revenue, contending that the appeal involved a substantial question of law. However, the application was dismissed, as the issue was previously detailed in another Tribunal case.

Refund to Service Recipient Directly:
The Tribunal referred to a previous case where it was established that in such instances, the refund should be directly provided to the service recipient, i.e., Garrison Engineers (MES). The refund claim was allowed with interest, following the precedent set by the Hon'ble Apex Court in a similar case.

In conclusion, the Tribunal allowed the appeal, directing the refund claim to be given directly to the service recipient, Garrison Engineers (MES), along with interest. The decision was based on established legal principles and previous Tribunal rulings, ensuring compliance with the law and addressing the issue of unjust enrichment.