2023 (6) TMI 469 - AT - Service Tax

Refund of service tax - providing services which were no more taxable as per exemption Notification No.25/2012-ST dated 20.06.2012 - rejection on the ground that refund was hit by doctrine of unjust enrichment - HELD THAT - ST-3 return was filed by the appellant on 30.04.2013. At column A 11.2, appellant claimed the said exemption through the said return. Appellant has also claimed exemption from service tax for an amount of Rs.43,26,000/-, in column B1.9 and in Part-C, appellant has claimed Rs.5,34,693/- to have been paid in advance under subrule (1A) of the said Rule 6. Therefore it is required to be examined whether there is any material on record to establish that Revenue had raised any objection to the said claim made by the appellant through the said ST-3 return. There are no counter from Revenue either through filing cross objections or through filing synopsis by the Authorised Representative or any submissions of the Authorised Representative stating that the said ST-3 return was not accepted by Revenue. The said amount of Rs.5,34,693/- was paid as advance under sub-rule (1A) of Rule 6 of Service Tax Rules and therefore by applying the precedent decision of this Tribunal in the case of Accounts Hub Pvt. Ltd. 2023 (3) TMI 1369 - CESTAT MUMBAI it is held that the appellant was eligible for the said refund. Since the amount sought for refund was advance paid as per the said sub-rule, the question of unjust enrichment does not arise - Appeal allowed.

Summary

Issues involved:
The issues in this case involve the eligibility of the appellant for a refund of service tax claimed under exemption Notification No.25/2012-ST and the application of the doctrine of unjust enrichment.

Eligibility for refund under exemption Notification:
The appellant, a service provider to educational institutions, filed an application for refund of service tax amounting to Rs.5,94,919/-, claiming exemption under Notification No.25/2012-ST. The original authority and the Commissioner (Appeals) denied the refund on grounds of unjust enrichment. The appellant contended that they were eligible for the refund as per the notification exempting services to educational institutions.

Contentions of the appellant:
The appellant argued that they had paid the service tax amount as an advance under sub-rule (1A) of Rule 6 of Service Tax Rules and claimed the correct refund amount to be Rs.5,34,693/-. They submitted documentary evidence, including revised invoices and debit/credit notes, to show that no service tax was collected from the service recipient. The appellant relied on a previous Tribunal decision to support their claim.

Contentions of the respondent:
The respondent argued that the service tax component was recovered by the appellant despite the services being exempted, invoking Section 73A of the Finance Act, 1994. They contended that the doctrine of unjust enrichment applied in this case, as the service tax was not paid as an advance and debit/credit notes were issued after the refund application.

Tribunal's decision:
The Tribunal examined the appellant's ST-3 return, which showed the claim for exemption and advance payment of Rs.5,34,693/-. Finding no objection from the Revenue to this claim, the Tribunal held that the amount was indeed paid as an advance under sub-rule (1A) of Rule 6. Citing a precedent decision, the Tribunal ruled in favor of the appellant, stating that the refund was justified. As the amount sought for refund was considered an advance payment, the doctrine of unjust enrichment was deemed inapplicable. The Tribunal allowed the appeal, directing the original authority to issue the refund cheque to the appellant.

Separate Judgment:
The judgment was pronounced by HON'BLE MR. ANIL G. SHAKKARWAR, MEMBER (TECHNICAL) on 08.06.2023.