2008 (8) TMI 218 - AT - Service Tax

CESTAT grants stay on refund order in duty burden case, emphasizes non-passing burden for refund claim.

The Appellate Tribunal CESTAT, New Delhi, granted a stay on the operation of an order allowing a refund in a case where the burden of duty passing on to ... Revenue filed these applications for stay of the operation of the impugned order whereby refund was allowed by Commissioner (Appeals) - contention of the Revenue is that onus is on the assessee to show that burden of duty has not been passed on to their customers, has not been discharged by assessee – prima facie contention of revenue merit acceptance – application of revenue accepted Issues: Stay petitions involving the passing on of duty burden to customers.In this judgment by the Appellate Tribunal CESTAT, New Delhi, the common issue in the stay petitions was whether the burden of duty had been passed on to customers. The Revenue filed applications seeking a stay on the operation of an order allowing a refund, arguing that the burden of duty is presumed to have been passed on to customers unless proven otherwise by the assessee. The respondents contended that the burden had not been passed on, citing a decision of the Hon'ble Gauhati High Court. The Tribunal referred to a Supreme Court decision on unjust enrichment, emphasizing the need for the petitioner to demonstrate payment without passing on the burden to consumers to claim a refund. Considering the Supreme Court decision, the Tribunal found merit in the Revenue's contention and stayed the operation of the impugned order pending appeal. However, the appeals were scheduled for regular hearing based on the facts and circumstances of the case and the respondent's request. The judgment highlighted the importance of proving payment without passing on the burden to consumers to claim a refund, as per the doctrine of unjust enrichment and statutory provisions.