2023 (12) TMI 44 - AT - Service Tax

Scope of remand order - Refund of service tax paid under goods and transport agency service GTA on a reverse charge basis - time limitation - whether the Assistant Commissioner and the Commissioner (Appeals) in their orders dated 30.01.2018 and 23.04.2018 travelled beyond the remand order? - HELD THAT - The Commissioner (Appeals) in the order dated 22.11.2016 held that the appellant would be entitled to refund but the matter was remanded to the Assistant Commissioner only for the limited purpose of verification of the documents. This is clear from paragraph 10 of the remand order. The Assistant Commissioner, pursuant to the remand order, did record a categorical finding that the bar of unjust enrichment would not be attracted since the amount was paid under reverse charge basis. After having held so, the Assistant Commissioner should have granted refund but what transpires from the order dated 30.1.2018 passed by the Assistant Commissioner is that he further proceeded to examine whether the appellant would be entitled to refund and for this purpose, in view of the decision of the Supreme Court in Singh Transporters, concluded that the transportation of coal within the mining area would appropriately be classifiable under GTA service. It is clear that the Assistant Commissioner travelled beyond the remand order as he proceeded to examine whether the appellant is entitled to refund or not on merits when this issue had been settled by the Commissioner (Appeals) in the order dated 22.11.2016 and this was not a matter which was remanded to the Assistant Commissioner. The order dated 23.04.2018 passed by the Commissioner (Appeals) cannot be sustained and is set aside in as much a categorical finding has been recorded by the Assistant Commissioner in order dated 30.1.2018 that the bar of unjust enrichment would not be attracted since the amount was paid under reverse charge basis, which finding has been recorded after examination of the documents as directed by the Commissioner (Appeals) in the order dated 22.11.2016. - refund allowed Appeal allowed.

Summary

Issues:
The issues involved in this case are the rejection of a refund claim by the Commissioner (Appeals), the applicability of service tax under goods and transport agency service (GTA) on a reverse charge basis, the timeliness of the refund claim, the remand of the matter by the Chhattisgarh High Court, the rejection of the refund claim by the Assistant Commissioner, the consideration of unjust enrichment, the relevance of the Supreme Court decision in Singh Transporters, and the entitlement of the appellant to a refund.

Relevant Factual Aspects:
The appellant filed a refund claim seeking refund of service tax paid under GTA on a reverse charge basis for the period 2005-11 following a Tribunal order. A show cause notice contended that the Tribunal order did not pertain to the appellant. The department appealed the Tribunal's final order, which was remanded by the Chhattisgarh High Court. The Assistant Commissioner rejected the refund claim, stating it was time-barred. The matter was again decided by the Tribunal, holding no service tax was payable by the appellant on GTA service. The Commissioner (Appeals) allowed the appeal, remanding for document verification. The department challenged the Tribunal's order in the Supreme Court. The Assistant Commissioner rejected the refund claim citing Singh Transporters, upheld by the Commissioner (Appeals).

Decision Analysis:
The appellant contended that the Assistant Commissioner and Commissioner (Appeals) erred in examining the appellant's entitlement to refund on merits. The appellant argued that consignment notes were not issued by transporters, making Singh Transporters irrelevant. The department supported the impugned order. The Tribunal found that the Assistant Commissioner exceeded the remand order by reexamining the refund entitlement. The Tribunal noted that Singh Transporters was not relevant due to the absence of consignment notes. Referring to the Kolkata Bench decision, the Tribunal set aside the Commissioner (Appeals) order, stating the appellant was entitled to a refund with interest.

Conclusion:
The Tribunal held that the Commissioner (Appeals) erred in examining the refund entitlement on merits beyond the remand order. The absence of consignment notes made Singh Transporters irrelevant. The Tribunal allowed the appeal, setting aside the Commissioner (Appeals) order, and ruled in favor of the appellant's entitlement to a refund with interest.