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of <h1>Separately invoiced transportation charges and service tax valuation dispute; tax levy rejected, refund allowed subject to unjust enrichment review</h1> Service tax liability on transportation charges was determined by examining whether such charges, billed separately, formed part of the taxable value of ... Refund claim - liability to pay the Service tax on transportation charges - Provisions of Unjust Enrichment - HELD THAT:- Revenue justified the action of the Department in raising the demand and rejecting the refund claim. Alternatively he urged that even if service tax is not leviable on transportation charges being separate bills have been issued, nevertheless the refund claim is subject to the Provisions of Unjust Enrichment which requires to be reconsidered. On going through the reason given by the Commissioner (Appeals) in the subsequent order with reference to the same facts and circumstances I do not find any justification for levy of service tax on transportation charges. Accordingly, party is entitled to refund of the said amount. Further in view of the submissions made by the Revenue, the position with reference to the unjust enrichment may be examined by the adjudicating authority. Thus these two appeals are disposed of in the above terms. Issues: (i) Whether service tax is leviable on transportation charges billed separately from C&F agent remuneration; (ii) Whether the appellants are entitled to refund of service tax collected/paid on such transportation charges and whether the refund claim is subject to the doctrine of unjust enrichment.Analysis: The appeals concern demands and refund claims under the Service Tax provisions of the Finance Act, 1994 in respect of amounts billed as transportation charges distinct from remuneration/commission for clearing and forwarding (C&F) services. Relevant factual matrix shows separate contracts and separate bills for transportation and for C&F/administration charges, and evidence of the C&F remuneration billed separately. The subsequent order of the Commissioner (Appeals) in the same facts concluded that service tax on C&F agents is to be computed on the remuneration/commission charged by the agent and that transportation, governed by a separate agreement and billed separately, does not form part of the taxable value of the C&F service. The refund claim for amounts paid as service tax on transportation charges therefore arises from the non-leviable character of those charges; however, the question whether any refund is barred or limited by unjust enrichment requires enquiry by the adjudicating authority.Conclusion: Service tax is not leviable on transportation charges that are governed by a separate contract and billed separately; the appellants are entitled to refund of service tax paid on such transportation charges. The question of unjust enrichment is to be examined afresh by the adjudicating authority.
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