2016 (9) TMI 1310 - AT - Service Tax

Appellant's Cement Manufacturing Refund Claim Denied Due to Unjust Enrichment and Final Appellate Order

M/s Ambuja Cements Limited Versus CCE, New Delhi

The appellant, engaged in cement manufacturing, sought a refund of service tax paid under reverse charge for clearing and forwarding services, citing a ... Maintainability of appeal - Refund claim - service tax paid on reverse charge basis, in respect of clearing and forwarding services received by them, which was not required to be paid - Held that: - the appellant approached the Revenue for the refund of service tax wrongly paid by them during the said period, which was already claimed by them and was rejected by the authorities till the level of Commission (Appeals) - The said refund claims stand again rejected by the lower Authorities, in the present proceedings, on the ground that the matter had already attained finality and it is not open to the assessee to again file the refund claim in respect of the same amount, which stands already adjudicated and which proceedings were not kept alive by the assessee, by way of filing appeal there against - refund not allowed - appeal anot maintainable - decided against appellant. Issues:1. Refund claim of service tax paid under reverse charge basis for clearing and forwarding services.2. Rejection of refund claim by original Adjudicating Authority and Commissioner (Appeals) on the ground of unjust enrichment.3. Challenge to the validity of amendments introduced by Finance Acts in 2000 and 2003 in relation to service tax liabilities.4. Hon'ble Supreme Court ruling on service tax liability for the period November 1998 to August 1999.5. Rejection of refund claims by lower authorities based on finality of previous appellate order.Analysis:1. The appellants, engaged in cement manufacturing, initially paid service tax under reverse charge for clearing and forwarding services. Upon realizing the error, they filed a refund claim of approximately &8377; 35 lakhs citing a judgment by the Hon'ble Supreme Court. The refund claim pertained to the period between July 1997 and August 1999.2. The original Adjudicating Authority rejected the refund claim citing unjust enrichment. The appellant appealed this decision, which was subsequently turned down by the Commissioner (Appeals) in an order dated 12/10/2000. The appellant did not challenge this appellate order, allowing it to become final.3. The appellant later challenged the validity of amendments introduced by Finance Acts in 2000 and 2003 regarding service tax liabilities under reverse charge before the Hon'ble Supreme Court. The Supreme Court, in its order dated 17/3/05, upheld the levy but exempted the period from November 1998 to August 1999 from service tax liability for C&F services.4. Following the Supreme Court ruling, the appellant sought a refund of the service tax erroneously paid during the exempted period. However, the lower authorities rejected these refund claims, arguing that the matter had already been conclusively settled and the appellant had not kept the proceedings alive by filing an appeal against the previous decisions.5. The rejection of the refund claims in the present proceedings was based on the finality of the previous appellate order by the Commissioner (Appeals), which had not been challenged further by the appellant. This lack of appeal against the earlier decision led to the rejection of the subsequent refund claims despite the change in the legal position due to the Supreme Court ruling.This detailed analysis of the judgment highlights the key issues surrounding the refund claims, legal challenges, and the impact of the Hon'ble Supreme Court ruling on the service tax liabilities of the appellant.