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of <h1>Appeal allowed, appellant to return funds to customers or Consumer Welfare Fund, emphasizing unjust enrichment.</h1> <h3>PRASAR BHARATI Versus COMMISSIONER OF SERVICE TAX DELHI</h3> PRASAR BHARATI Versus COMMISSIONER OF SERVICE TAX DELHI - 2022 (61) G. S. T. L. 45 (Tri. - Del.) Issues Involved:1. Taxability of the service provided by the appellant.2. Applicability of Section 73A(2) of the Finance Act, 1994.3. Doctrine of unjust enrichment.4. Imposition of interest and penalty.Detailed Analysis:1. Taxability of the Service Provided by the Appellant:The appellant, engaged in broadcasting services through Doordarshan Kendra, was carrying advertisements but not creating them. The Central Board of Excise and Customs (CBEC) Circular No. 341/43/96-TRU dated 31.10.1996 clarified that the amount paid for space and time in print or electronic media would not be included in the value of taxable service rendered by the advertisement agency. The impugned order acknowledged this clarification, and the Hon’ble Madras High Court upheld its validity in M/s. Adwise Advertising Pvt. Ltd. [1998 (97) ELT 35].2. Applicability of Section 73A(2) of the Finance Act, 1994:The appellant collected amounts as service tax from advertisers during September 2002 to March 2003, but Section 73A(2), which mandates depositing such collected amounts with the Government, was introduced only in 2006. The appellant argued that this section could not be applied retrospectively. However, the Tribunal held that irrespective of the non-existence of Section 73A(2) at the relevant time, the collection was prohibited by Article 265 of the Constitution of India, which states that no tax shall be levied or collected except by the authority of law.3. Doctrine of Unjust Enrichment:The doctrine of unjust enrichment was discussed extensively. The Tribunal noted that the appellant had collected amounts as service tax without any authority and retained them, resulting in unjust enrichment. The principle was established in various cases, including Mafatlal Industries Ltd. vs. Union of India [1997 (5) SCC 536] and Indian Council for Enviro Legal Action vs. Union of India [1996(5) SC 281]. The Tribunal emphasized that the appellant should not profit from amounts collected under the mistaken belief of tax liability.4. Imposition of Interest and Penalty:The Adjudicating Authority confirmed the demand of Rs. 36,92,874/- along with interest and imposed penalties under Sections 76 and 77(1) of the Finance Act, 1994. The appellant contended that since no service tax was payable, the imposition of penalty and interest was unjustified. The Tribunal set aside the order confirming the demand, interest, and penalties but directed the appellant to return the collected amounts to its customers within two months or deposit them in the Consumer Welfare Fund if the customers could not be traced.Conclusion:The Tribunal allowed the appeal but directed the appellant to return the collected amounts to the customers or deposit them in the Consumer Welfare Fund, emphasizing the principle of unjust enrichment and the constitutional mandate against unauthorized tax collection. The compliance report was to be furnished within 15 days after the two-month period.
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