2023 (4) TMI 1197 - AT - Service Tax

Tribunal Upholds Service Tax Refund Decision: Consumer Welfare Fund Credited

The Tribunal upheld the decision to credit the refund of service tax paid by transportation service appellants to the Consumer Welfare Fund, as the tax ... Refund of Service Tax - principles of unjust enrichment - refund was sanctioned but the same was credited in the Consumer Welfare Fund on the ground that appellant have recovered service tax from their customers and the same was shown as expenditure in the books of accounts - service tax on Tour Operator Service discontinued by Issuance of N/N. 20/2009-ST dated 07.07.2009 having retrospective effect. HELD THAT:- The very issue involved in the present case is no longer res-integra as the same has been decided against the assessee in CCE & ST – RAJKOT VERSUS M/S EAGLE CORPORATION PVT LTD. [2018 (7) TMI 855 - CESTAT AHMEDABAD] and M/S RAJDHANI TRAVELS, M/S RK TRAVELS, M/S NEW RAJDHANI TRAVELS, M/S TANNA TRAVELS AGENCY VERSUS COMMISSIONER (APPEALS) OF CENTRAL EXCISE [2018 (4) TMI 168 - CESTAT AHMEDABAD] - In the identical set of facts and legal issue involved in the present case as well in the cited decisions wherein it was held that refund of the appellant in the above cases is hit by unjust-enrichment. Since the appellant have paid service tax in the routine course and subsequently when the service tax was made exempted retrospectively, the incidence of service tax stood passed on. Therefore, the lower authorities have rightly credited the refund amount in the Consumer Welfare Fund - Appeal dismissed. Issues involved:The issue involves the refund of service tax paid by the appellants, which was credited in the Consumer Welfare Fund on the ground that the incidence of service tax was passed on to customers.Summary:Issue 1: Refund of service tax and unjust enrichmentThe appellants, engaged in transportation services, filed refund applications for service tax paid after a retrospective notification exempted tour operators from service tax. The Adjudicating Authority credited the refund in the Consumer Welfare Fund, alleging that the appellants passed on the tax to customers. The appellants contended that showing tax as expenditure doesn't prove passing on the tax. They cited various judgments supporting their argument. The Revenue supported the Adjudicating Authority's decision, relying on different judgments. The Tribunal noted that similar cases were decided against the assessee, holding the refund as unjust enrichment due to passing on the tax. The Tribunal agreed that as the appellants paid the tax before it was exempted, the incidence of tax was passed on, justifying the credit to the Consumer Welfare Fund. Consequently, the Tribunal upheld the lower authorities' decision to credit the refund amount and dismissed the appeals.This judgment addresses the issue of refunding service tax paid by appellants engaged in transportation services, where the tax was later exempted retrospectively. The Tribunal examined whether the tax incidence was passed on to customers, leading to the credit of the refund in the Consumer Welfare Fund. The Tribunal considered arguments from both sides, referring to relevant judgments, and concluded that the refund was rightly credited due to the tax being passed on. The decision aligns with previous cases where similar refunds were denied based on the principle of unjust enrichment.