By Puloma Dalal, Jayesh Gogri, Mandar Telang Chartered Accountants
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Whether in the light of the principle of unjust enrichment recipient of service can claim refund u/s. 11B of Central Excise Act if ultimate burden of service tax liability has been borne by him? Held, Yes
Facts:
An assessee, a service recipient, received services of transport of natural gas from M/s. RGTIL falling under “Transport of Goods other than Water through Pipeline or other Conduit Services.” Transmission charges payable are fixed by a regulatory body. Invoices are raised on the basis of the provisional rates notified. Later, the tariff was approved with retrospective effect resulting into a downward revision. The adjudicating authority allowed refund claim of the assessee for the proportionate excess service tax remitted by RGTIL and borne by him. Appellate authority reversed this order in appeal filed by the Revenue on the ground that claim was filed by the service receiver and that the expression “any person” in section 11B of the Central Excise Act, 1944 did not include the service receiver. The Tribunal allowed the refund. The Revenue raised two additional contentions before the High Court namely limitation for applying refund and principle of unjust enrichment.
Held:
The Additional issues raised were not accepted on the ground that they were not raised before and the observations of adjudicating authority allowing refund go in favour of assessee. The High Court relying on the decision of Mafatlal Industries Ltd. vs. Union of India 1997 (89) ELT 247 held that the assessee is entitled to claim a refund of excess service tax paid.
