2022 (3) TMI 1167 - AT - Service Tax

Refund of service tax - services provided to Military Engineering Services (MES) for the miscellaneous works at various stations of army across the country - period 06.07.2015 to 25.04.2016 - section 102 of the Finance Act 1994 - HELD THAT - The appellant is entitled to refund with respect to the service tax paid in respect of the four work orders where the financial bids were opened prior to 1.3.2015. Accordingly it is held that the appellant shall be entitled to proportionate refund with respect to the four contracts where the financial bids were opened prior to 1.3.2015. It is held that the appellant shall be entitled to proportionate refund out of the amount of 11, 32, 049/- relating to four works where the financial bids was opened prior to 1.3.2015. The Adjudicating Authority is directed to work out the proportionate amount of refund and granted the same to the appellant within a period of 60 days from the date of receipt of this order along with interest under Section 11 BB of the Central Excise Act - Appeal allowed - decided in favor of appellant.

Summary

Issues:
Rejection of refund in part, admissibility of remaining refund, requirement to deposit refund amount in Government Treasury, applicability of unjust enrichment, interpretation of contract dates for refund eligibility.

Analysis:
The appellant, engaged in providing construction services, filed a refund claim of service tax. The appellant's documents were scrutinized, revealing deficiencies like missing contract agreements, non-submission of stamp duty evidence, and incomplete running bills. The Commissioner (Appeals) rejected a part of the refund due to the contract date falling after 1.3.2015. However, the Commissioner acknowledged the nature of services provided to the Government of India and accepted the refund for the remaining amount found admissible.

The appellant contended that they fulfilled tender requirements before 1.3.2015, making them eligible for a refund. They cited a Division Bench decision supporting their claim based on the date of tender opening as the contract date. The Tribunal, following the precedent, allowed a proportionate refund for contracts where financial bids were opened before 1.3.2015. The Adjudicating Authority was directed to calculate and grant the refund with interest within 60 days.

Regarding unjust enrichment, it was noted that the appellant had received reimbursement from the MES Department, and conditions were set for refund handling. The Commissioner directed the appellant to deposit the admissible refund amount in the Government Treasury to avoid unjust enrichment. The Tribunal upheld this decision, emphasizing compliance with the circular issued by the MES Headquarters.

In conclusion, the Tribunal modified the impugned order, granting a proportionate refund for contracts meeting the tender opening date criteria. The appellant's entitlement to refund was affirmed based on the contract dates, and the Adjudicating Authority was instructed to process the refund promptly. The judgment highlighted the importance of meeting contractual obligations and refund handling procedures to ensure compliance with tax regulations.