TaxTMI 
TaxTMI 
2016 (3) TMI 205
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....paid service tax on royalty so received and sought refund of service tax paid during the period 1.4.2007 to 31.3.2008 on the ground that as a result of merger from 1.4.2007 it became service to self and therefore no service tax was payable but was paid as the order of the High Court approving the merger was received only on 28.5.2008. Vide order-in-original dated 26.8.2009, the primary adjudicating authority sanctioned the refund of Rs. 71,74,496/-. However, Revenue filed an appeal against the said order before Commissioner (Appeals). The Commissioner (Appeals) vide order in original dated 8.6.2008 remanded the case to the original adjudicating authority with the direction to UIL to file relevant documents before the primary adjudicating authority in respect of proof of compliance of the direction contained in the order dated 26.5.2008 of the Hon'ble High Court regarding the date of merger of three companies on which the issue of taxability of the payment in respect of royalty was dependent. The primary adjudicating authority in turn held that refund of Rs. 71,74,496/- already granted deserved to be rejected and recovered. 3. The appellant filed appeal before the Commissioner (A....
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....elhi Regarding unjust enrichment ld. Advocate has contended as under : (i) No Cenvat credit of the impugned service tax was taken by Usha International Ltd. During the relevant period M/s UIL did not manufacture any goods on which the brand name was used. Therefore it was not a manufacturer or provider of service and as a result, the presumption of passing on the burden does not arise in its case because such presumption arises by virtue of under Section 12B of Central Excise Act, 1944 which is applicable only to a person who has paid duty of excise on any goods (and by virtue of Section 83 of the Finance Act, 1994 also to a person who has paid service tax). (ii) The reasoning given by the primary adjudicating authority in its order dated 20.12.2012 that the price for the same models of electric fan/sewing machine either remained the same or increased after 31.3.2007 and that if the burden had not been passed on the prices after 1.4.2007 would have been lower than the prices during the period prior to 1.4.2007 and even after post merger there was no decrease in the prices and in some cases the prices actually went up. The appellant contended that va....
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....y Supreme Court judgement in the case of Marshall Sons & Co. (supra) which held as under: "14. Every scheme of amalgamation has to necessarily provide a date with effect from which the amalgamation/transfer shall take place. The scheme concerned herein does so provide viz. 1.1.1982. It is true that while sanctioning the scheme, it is open to the Court to modify the said date and prescribe such date of amalgamation/transfer as it thinks appropriate in the facts and circumstances of the case. If the Court so specifies a date, there is little doubt that such date would be the date of amalgamation/date of transfer. But where the Court does not prescribe any specific date but merely sanctions the scheme presented to it as has happened n this case it should follow that the date of amalgamation/date of transfer is the date specified in the scheme as the transfer date. It cannot be otherwise. It must be remembered that before applying to the Court under Section 391(1), a scheme has to be framed and such scheme has to contain a date of amalgamation/transfer. The proceedings before the Court may take some time; indeed, they are bound to take some time because sev....
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....ssment on the Transferee Company taking into account the income of both of Transferor or Transferee Companies and also to make separate protective assessments on both the Transferor and Transferee Companies separately. There may be a certain practical difficulty in adopting this course inasmuch as separate balance sheets may not be available for the Transferor and Transferee Companies. But that may not be an insuperable problem inasmuch as assessment can always be made, on the available material, even without a balance sheet. In certain cases, best judgment assessment may also be resorted to. Be that as it may, we need not pursue this line of enquiry because it does not arise for consideration in these cases directly." Regarding the contention of the DR that the judgement of Supreme Court in the case of Marshall Sons & Co. (supra) was in the context of income tax, we find that in the case of Jindal Strips Ltd. (supra), the Honble Andhra Pradesh High Court applied the same principle to indirect tax viz VAT. The relevant portions of the said judgement are reproduced below : "15. It is the settled position of law that a fiction created under law must normally be car....
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.... appointed date as per Amalgamation Scheme and therefore 1.4.204 is required to be taken as the date of amalgamation and not the date on which entire formalities were completed and the service provided by assessee with effect from 1.4.2004 is to be considered as provided to self, in which case, no service tax liability would arise against them. 7. In the light of the foregoing binding precedents there remains no scope for any debate that the date of amalgamation in the present case is to be held to be 1.4.2007 and not 20.6.2008. Obvious consequence of this is that the service rendered during the impugned period (1.4.2007 to 31.3.2008) became service to self and consequently service tax paid during the said period became eligible for refund. Thus the refund of Rs. 71,74,496/- (as was initially sanctioned by the primary adjudicating authority) was clearly admissible to the appellant. However every refund has to be tested on the yardstick of the doctrine of unjust enrichment in terms of Section 11B of Central Excise Act read with Section 83 of the Finance Act, 1994. The appellant has contended that it was neither a manufacturer of goods nor was it providing any service (which utili....
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.... (e) the [duty of excise and interest, if any, paid on such duty] borne by the buyer, if he had not passed on the incidence of such [duty and interest, if any, paid on such duty] to any other person; (f) the [duty of excise and interest, if any, paid on such duty] borne by any other such class of applicants as the Central Government may, by notification in the Official Gazette, specify : Provided further that no notification under clause (f) of the first proviso shall be issued unless in the opinion of the Central Government the incidence of [duty and interest, if any, paid on such duty] has not been passed on by the persons concerned to any other person." From the wording of Section of 11B(2) it becomes clear that when an amount is held to be refundable, it is to be credited to the Consumer Welfare Fund and that the payment to applicant is more in the nature of exception inasmuch as that is subject to the condition that the person seeking refund has borne the burden and has not passed on the incidence of such duty to any other person. Thus even if Section 12B is held to be inapplicable to the present case, the onus still lies on the appell....