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TMI Blog2022 (3) TMI 555X X X X Extracts X X X X X X X X Extracts X X X X ..... it it with the Government also did not exist at the relevant time. Thus, the Government had no authority to demand the amount. Had the appellant collected the amounts from its customers as representing tax as a matter of precaution, it could have paid it as tax under protest. Once, it is decided that no tax is payable, the appellant could have repaid the customers and claimed a refund. If the appellant had claimed refund without returning the amounts in part or whole to its customers, such refund would have been sanctioned under section 11B and the amounts would have been credited to the Consumer Welfare Fund under Section 11B of the Central Excise Act as applicable to the provisions of Service tax by Finance Act, 1994. Section 11B, including the provision of refunds being credited to the Consumer Welfare Fund were applicable during the period of dispute - Neither the Government nor the appellant has any right over the amounts collected from the customers as representing service tax in the absence of any legal provisions. The appellant is directed to return the amount collected by it, under the garb of its liability to pay service tax when actually it was not liable, to all t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the provisions of section 68 of Finance Act, 1994 and three following show cause notices were served upon the appellant. SCN No. and date For the period Amount 1. 5/2002 dated 1.4.2002 1998-1999 to 2000-2001 22.76 lakh 2. 20/03 dated 9.5.2003 2001-2002 65.78 lakh 3. 39/03 dated 6.10.2003 2002-2003 68.74 lakh 4. The appellant later applied for Service Tax registration on 6.08.2003 and the registration certificate thereof was issued by the respondent. Thereafter, the three Show Cause Notices came under the jurisdiction of Commissioner of Service Tax, Delhi for adjudication who, by the impugned Order-in-Original No. 029/15- 16 dated 29.3.2016 dropped the demand with respect to first two show cause notices. However, he confirmed an amount of ₹ 36,92,874/- along with interest against the third Show Cause Notice No. 39/2003 dated 6.10.2003. He also imposed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no mistake has been committed by the Adjudicating Authority when the demand has been confirmed and penalty has been imposed and interest also has been demanded. Decision of CESTAT, Ahmadabad in the case of IWI Cryogenic Vaporization System India vs. CCE ST Vadodara II reported as [2016 (41) STR 290 (Tri-Ahmd)] has also been relied upon. With these submissions, learned Departmental Representative has prayed for appeal to be dismissed. 8. We have heard rival contentions of the parties and perused the records. Advertisement involves broadly three activities. The first is the creative work where an expert conceptualises the advertisement and works out how it should be made in terms of words, symbols, pictures, models, dialogues, music, etc. The second is the actual making of the advertisement such as printing the banner, pamphlet, recording the advertisement jingle, making the video which constitutes the advertisement. The third activity is the actual carrying of the advertisement through media. This is done by newspapers, magazines, radio channels, television channels, etc. who all carry the advertisement and charge a price for the space in the newspaper or the time in the TV or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in any manner as representing service tax, shall forthwith pay the amount so collected to the credit of the Central Government. (2) Where any person who has collected any amount, which is not required to be collected, from any other person, in any manner as representing service tax, such person shall forthwith pay the amount so collected to the credit of the Central Government. (3) Where any amount is required to be paid to the credit of the Central Government under sub- section (1) or subsection (2) and the same has not been so paid, the Central Excise Officer shall serve, on the person liable to pay such amount, a notice requiring him to show cause why the said amount, as specified in the notice, should not be paid by him to the credit of the Central Government. (4) The Central Excise Officer shall, after considering the representation, if any, made by the person on whom the notice is served under sub-section (3), determine the amount due from such person, not being in excess of the amount specified in the notice, and thereupon such person shall pay the amount so determined. (5) The amount paid to the credit of the Central Government under sub-section (1) or sub- sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcise duty was to be levied on the short fall. The Supreme Court held that the Government had no authority of law to collect this additional excise tax. In view of the discussion as above, even in this case, the amount collected by the appellant cannot be demanded by the Government in the absence of any legal provision. However, it is equally true that the appellant itself was not entitled to collect the same from his customers. Retention of said amount by the appellant will definitely be unjust enrichment of appellant. 13. The doctrine of unjust enrichment was first observed in 1860s in Rambux Chittenged vs Madhusudan Paul Choudhary s case. The principle was later notified in the Indian Contract Act, 1872. This doctrine of unjust enrichment, a volatile and elusive judgement made hypothesis till the other day, became a hard and inescapable reality on the statute book in India in 1991 when Parliament accepted it and enacted the Central Excise and Customs Law (Amendment) Act, 1991. The amendments required every assessee seeking refund of an illegally recovered tax to prove that he had not passed on the burden of the tax to the customer or to any other person for one who had passed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irect taxes which are supposed to be and are permitted to be passed on to the buyers. 16. Hon ble Apex Court in the case of Mafatlal Industries (supra) case observed that the Central Excise duty and Customs duty Law (Amendment Act 1996) required every assesse seeking refund of illegally recovered tax to prove that he has not passed on the burden of such tax to the customers or to any other person. The judgement attaches significance to the unethical consequences which would follow if no bar of unjust enrichment is applied by the Courts. Article 265 of Indian Constitution and section 72 of Indian Contract Act are no doubt held to be read and understood in the light of philosophy and the core values of the Indian Constitution and in keeping with equality and given conscience. In the words of Hon ble Jeevan Reddy J., the State should refrain from conferring from an unearned and unjustifiable windfall upon the assessee. It was held that person who has passed on the burden of levy should not be allowed to profiteer by ill gotten gains and unjustly enriched. It turns out that if the levy is not excisable, it is refundable to the person who has burdened the liability inord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount to its customers. A third possibility is that the appellant knew that no tax was payable but since the SCNs were pending, as a matter of abundant precaution to save itself from a tax liability at a later stage, collected the amounts as Service tax from its customers. If so, once the decision is made that no service tax is payable, the appellant should have returned the amounts so collected as tax to its customers. It is clear that appellant has done none of the these but has retained the amounts collected from its customers as service tax. Now learned counsel for the appellant argues that in the absence of any provision, the Government cannot demand the amount collected either as tax or under section 73A(2) and the appellant has a right to keep the amount at the expense of the customers. Such retention thereof with the appellant is definitely an act against equity making the appellant unjustifiably enriched. The statutory provisions cannot be read as to imply that the appellant has a right to such unjust enrichment. Neither has the Government any right to recover tax (section 73) or any amount collected as representing tax (section 73A) in the absence of any legal provision ..... X X X X Extracts X X X X X X X X Extracts X X X X
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