Case Note & Summary
The appellant, M/s Madura Coats Pvt. Ltd., a non-resident service provider, paid service tax under protest for the period 10.09.2004 to 31.12.2004. After a long drawn litigation, the Commissioner of Central Excise and Service Tax (Appeals) allowed the refund claim by order dated 28.05.2009, which was confirmed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on 28.05.2009. The Revenue filed an appeal against the refund order along with a stay application. The stay application was dismissed, yet the refund was not made. The appellant then filed a writ petition before the High Court, which was dismissed by the learned Single Judge on 11.03.2013. The present writ appeal was filed against that dismissal. The core legal issue was whether the appellant was liable for service tax for the said period, given that the tax was paid by a non-resident. The appellant argued that the refund order had attained finality as the Revenue's stay application was dismissed, and the principle of unjust enrichment did not apply. The Revenue contended that the refund could not be granted due to the pendency of the appeal. The Division Bench of the High Court held that once the stay application is dismissed, the refund must be granted forthwith. The court further held that the principle of unjust enrichment under Section 11B of the Central Excise Act, 1944, was not applicable as the tax was paid by the appellant itself and not collected from any third party. The court set aside the order of the learned Single Judge and directed the respondents to refund the amount within four weeks, failing which interest at 12% per annum would be payable.
Headnote
A) Service Tax - Refund - Unjust Enrichment - Section 11B of Central Excise Act, 1944 read with Finance Act, 1994 - The appellant, a non-resident service provider, paid service tax under protest and was granted refund by the Commissioner (Appeals) and CESTAT. The Revenue's appeal against the refund order was dismissed, but refund was withheld. The High Court held that once the stay application is dismissed, the refund must be granted without delay, and the principle of unjust enrichment does not apply as the tax was paid by the appellant and not collected from any other person. (Paras 1-6) B) Service Tax - Liability of Non-Resident - Finance Act, 1994 - Section 66A - The dispute pertained to whether the appellant, a non-resident, was liable to pay service tax for the period 10.09.2004 to 31.12.2004. The court noted that the issue was already decided in favor of the appellant by the appellate authorities, and the Revenue's challenge had failed. (Paras 2-4)
Issue of Consideration
Whether the appellant was liable for payment of service tax for the period 10.09.2004 to 31.12.2004, as the service tax was paid by a non-resident person?
Final Decision
The appeal is allowed. The order dated 11.03.2013 passed in Writ Petition No.3740/2013 is set aside. The respondents are directed to refund the amount within four weeks from the date of receipt of the order, failing which interest at 12% per annum shall be payable.
Law Points
- Refund of service tax
- unjust enrichment
- non-resident service provider
- liability for service tax
- Section 11B of Central Excise Act
- 1944
- Finance Act
- 1994
