2024 (10) TMI 679 - AT - Service Tax

Refund of service tax paid under protest - applicability of doctrine of unjust enrichment - concept of mutuality - time limitation - HELD THAT - There is no dispute that the appellant have submitted a letter of protest, merely because it was submitted to the Superintendent, it cannot be said that the procedure was not followed. The objective of payment under protest is that in any form the appellant should express their intention of making payment under protest which is clearly complied by their letter of protest filed before Superintendent. Therefore, as regard the payment of service tax under protest, there are no fault and therefore, the refund claim is not hit by limitation. As regard, the merit of the issue, the same has been settled by Hon ble Supreme Court in the case of West Bengal vs Calcutta Club Limited 2019 (10) TMI 160 - SUPREME COURT wherein it was held that on the Principles of Mutuality the amount collected from the members by the club would not be liable to service tax. Therefore, reliance of department to the case of Sports Club 2013 (7) TMI 510 - GUJARAT HIGH COURT pending before Hon ble Supreme Court does not exist. The doctrine of unjust enrichment is not applicable in the present case - the appellant is eligible for refund of service tax paid by them along with interest in accordance with law - the impugned order is upheld - Revenue s appeal is dismissed.

Summary

Issues:
- Challenge to order-in-appeal regarding payment of service tax under protest
- Interpretation of the doctrine of unjust enrichment in the context of service tax refund claims

Analysis:
The judgment by the Appellate Tribunal CESTAT Ahmedabad dealt with the challenge by the Revenue against an order-in-appeal related to the payment of service tax under protest by a respondent YMCA for the period of April 2014 to September 2014. The Revenue contended that the service tax was not paid under protest as none of the challans showed payment made under protest, and the protest letter was not submitted to the proper authority. The Commissioner (Appeals) had allowed the respondent's appeal, leading to the Revenue's present appeal. The respondent argued that they had indeed submitted a letter of protest, expressing their intention clearly. They cited relevant judgments to support their stance. The Tribunal noted that the submission of the protest letter to the Superintendent was sufficient to indicate the intention of payment under protest, dismissing the Revenue's grounds on limitation and merit. The Tribunal referenced the Hon'ble Supreme Court's decision in the case of West Bengal vs Calcutta Club Limited regarding the Principles of Mutuality, stating that service tax would not be applicable to amounts collected from members by a club. The Tribunal also addressed the doctrine of unjust enrichment, citing its previous decision and the Commissioner (Appeals) finding that unjust enrichment did not apply due to the principle of mutuality. The Tribunal upheld the impugned order, dismissing the Revenue's appeal and allowing the respondent's refund claim for service tax paid, along with interest.

In conclusion, the Tribunal's detailed analysis focused on the submission of the protest letter, the application of the Principles of Mutuality in determining service tax liability, and the doctrine of unjust enrichment in the context of service tax refund claims. The judgment clarified that the protest letter's submission to the Superintendent sufficed to indicate payment under protest, and the principle of mutuality exempted the service tax on amounts collected from club members. The Tribunal's decision highlighted that unjust enrichment did not apply in this case due to the principle of mutuality, supporting the Commissioner (Appeals) finding. The judgment upheld the impugned order, dismissing the Revenue's appeal and granting the respondent's refund claim for service tax paid, along with interest.