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TMI Blog2023 (12) TMI 1070X X X X Extracts X X X X X X X X Extracts X X X X ..... mption from service tax would be withdrawn even before submitting its bids and would have included the service tax element in the bills. It is found impermissible to hold that the appellant had indirectly passed on the burden of the service tax to its client government departments. Once this anomalous and baseless presumption that the service tax would have been indirectly passed on by the appellant to its client government departments is removed, no basis remains for rejecting the refund claim or crediting it to the Consumer Welfare Fund. What distinguishes the present case from UNION OF INDIA VERSUS SOLAR PESTICIDE PVT. LTD. [ 2000 (2) TMI 237 - SUPREME COURT] is the fact that no service tax was paid when the appellant submitted its bids to the clients. Therefore, there is no scope for passing on the burden of any service tax at that stage. After the service was rendered, it was only entitled to the amounts which it bid and which were accepted in the contract and not to any additional amount as service tax. The contracts specifically exclude any additional payments towards service tax - The Commissioner s reasoning in the impugned order is based on the presumption as to ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llected during the period commencing from the 1st day of April, 2015 and ending with the 29th day of February, 2016 (both days inclusive), in respect of taxable services provided to the Government, a local authority or a Governmental authority, by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation or alteration of (a) a civil structure or any other original works meant predominantly for use other than for commerce, industry or any other business or profession; (b) a structure meant predominantly for use as (i) an educational establishment; (ii) a clinical establishment; or (iii) an art or cultural establishment; (c) a residential complex predominantly meant for self-use or for the use of their employees or other persons specified in Explanation 1 to clause (44) of section 65B of the said Act, under a contract entered into before the 1st day of March, 2015 and on which appropriate stamp duty, where applicable, had been paid before that date. (2) Refund shall be made of all such service tax which has been collected but which would not have been so collected had sub-section (1) b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d also apply where the incidence of duty is passed on indirectly. 6. Learned counsel for the appellant submitted that the finding in the impugned order that it had indirectly passed on the burden to the government departments is not correct. The Commissioner (Appeals) recorded correctly that its contracts were inclusive of all duties and taxes but his statement that when it had submitted the bids there was no exemption from service tax is incorrect on the face of it. He submits that until 1.4.2015, there was exemption from service tax. It is only from 1.4.2015 that the exemption was withdrawn. Thereafter, the exemption was given retrospectively by section 102 of the Finance Act, 1994. It is for this reason that the refund provision under section 102 provided for refunds only in such cases where the contracts were entered into prior to 1 March 2015 (i.e., at the time when there was an exemption from service tax). It is undisputed that the appellant s refunds met with this condition of the contracts that they should have been made prior to 1 March 2015.Evidently, the bids must have been made prior to the contracts were signed and exemption from service tax was available at that ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the service tax would have been indirectly passed on by the appellant to its client government departments is removed, no basis remains for rejecting the refund claim or crediting it to the Consumer Welfare Fund. 10. The Commissioner relied on Solar Pesticide Pvt. Ltd. in which the Supreme Court held that the principle of unjust enrichment would apply not only where the imported goods (on which the duty has been paid) are sold but to also to such cases, where the imported goods are used by the importer to manufacture and such manufactured goods are further sold by the importer. In the latter case, the importer may pass on the incidence of duty indirectly to the customer which also falls within the scope of unjust enrichment under section 27 of the Customs Act, 1962. The relevant paragraphs of the judgment are as follows: 20. We are of the opinion that the aforesaid observations would be applicable in the case of captive consumption as well. To claim refund of duty it is immaterial whether the goods imported are used by the importer himself and the duty thereon passed on to the purchaser of the finished product or that the imported goods are sold as such with the incidence of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was not decided by the High Court in Solar Pesticide s case (supra) because in its opinion the principle of unjust enrichment could not apply to the cases of captive consumption. In the case of Solar Pesticide Pvt. Ltd., therefore, we do not go into this question whether the incidence of duty had not been passed on by the respondent. This appeal is, accordingly, allowed and the impugned judgment of the High Court is set aside, the effect of which would be that the writ petition filed by the Solar Pesticide Pvt. Ltd. stands dismissed. Writ Petition (C) No. 189 of 1993 filed by M/s. Solar Pesticides Pvt. Ltd. in this Court also stands dismissed. No costs. 11. The ratio of Solar Pesticide is well known and the concept of unjust enrichment applies not only to cases where the duty is collected from the customers directly representing it as duty but also to such cases where it is indirectly collected by including it as the cost of raw material in the manufacture of final products and such final products are further sold. It is not difficult to ascertain if the duty that has been incurred was included in the cost of raw material or otherwise from the assessee s books of accounts. For ..... X X X X Extracts X X X X X X X X Extracts X X X X
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