TaxTMI 
TaxTMI 
TaxTMI 
2019 (6) TMI 904
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....the officers of the Central Excise Anti Evasion, Delhi searched the premises of the Appellant on 6 October, 2003 and found that it was engaged in providing service of "Online Information" without obtaining registration from the Service Tax Department and without payment of service tax on the services provided by them. The Appellant, however, during the course of the search, voluntarily, deposited an amount of Rs. 1 Crore. The Appellant also subsequently by letter dated 27 October, 2003 deposited another cheque of Rs. 11,36,840/-. 3. Thereafter, a show cause notice dated 24 August, 2004 was issued to the Appellant mentioning therein that it had provided online information services between 16 July, 2001 and 6 October, 2003 and even though it had received service tax for rendering taxable service to the clients but it had not discharged the service tax liability. The Appellant was, therefore, called upon to pay service tax. 4. The Appellant submitted a reply mentioning therein that the services rendered by the Appellant would fall under the category of "Commercial Training and Coaching" but computer coaching centres were exempted from payment of service tax. It was also stated that....
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....ises on 6 October, 2003 and thereafter, a cheque of Rs. 11,36,840/- on 27 October, 2003 under pressure. The Appellant referred to various decisions to contend that any amount deposited during the course of investigation cannot be considered as deposit of service tax since it is merely a deposit and the issue of unjust enrichment, therefore, should not be examined and such amount should be directed to be refunded. It was also stated that this amount was shown separately in the invoices. It was also stated that the Appellant had received service charges only from different customers and so when service tax had not been collected from the customers, the question of unjust enrichment did not arise. 9. The adjudication officer, however, did not accept the contention of the Appellant regarding unjust enrichment being not applicable and, therefore, while sanctioning the refund of Rs. 1,11,36,840/- directed that it should be credited to the Consumer Welfare Fund under Section 11B(2) of the Act. 10. It is against this Order dated 31 March, 2011 that the Appellant filed an Appeal before the Commissioner(Appeals), which Appeal was rejected and the Order passed by the adjudicating authorit....
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....the Appellant, this amount was deposited because officers had forced the Appellant to deposit it. It is also not in dispute that subsequently on 27 October, 2003, the Appellant deposited another cheque of Rs. 11,36,840/-. It is much thereafter on 24 August, 2004, that a show cause notice was issued to the Appellant by the Assistant Commissioner (AE) Central Excise, Delhi requiring it to explain why the amount mentioned in the notice should not be recovered from the Appellant towards service tax and why penalty should not be imposed and interest should not be charged. The demand made in the show cause notice was confirmed by the Adjudicating Officer but in the Appeal filed by the Appellant before the Tribunal, the Order was set aside and the Appeal was allowed. 15. It is as a consequence of the Order passed by the Tribunal on 25 August, 2008 that the Appellant filed an application claiming refund of Rs. 1,11,36,840/- on 21 May, 2009. The Department, however, issued a show cause notice dated 23 March, 2010 to the Appellant to explain why the refund claim should not be rejected. The Appellant filed a reply. The Assistant Commissioner by Order dated 31 March, 2011 sanctioned the refu....
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.... that it was not a case of refund of duty since the assessee had deposited the amount under protest at the time of investigation. The High Court found that it was a consistent view taken by the Courts that any amount deposited during the pendency of adjudicating proceedings or investigation is in the nature of deposit made under protest and, therefore, the principles of unjust enrichment would not apply for a refund claimed for this amount. The relevant portion of the Judgement of the High Court is reproduced below: "7. The first question of law, which is raised, relates to the plea of unjust enrichment and much emphasis is laid on the decision of the Supreme Court in Mafatlal Industries case (1997 (89) ELT 247 (SC)). Relevant portion of the order passed by the Supreme Court in Mafatlal Industries case (supra) has been extracted in the grounds (b) and (c). There is no dispute with regard to the proposition of law as laid down by the Supreme Court. In the present case, as is evident from the records, it is not a case of refund of duty. It is a pre-deposit made under protest at the time of investigation, as has been recorded in the original proceedings itself. In this regard, it ha....
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....rder passed by the Adjudicating Authority. The Company thereafter, filed a refund claim on 27 January, 2014. A show cause notice dated 2 April, 2014 was issued to the Company requiring it to explain why the refund claim should not be rejected for the reason that it had not been made within one year. No Order was passed and, therefore, a writ petition was filed in the Allahabad High Court. The Allahabad High Court examined the provisions of Section 11AB of the Central Excise Act which contemplates that the amount shall be refunded to the assessee provided the incidence of such duty had not been passed on by him to any other person. The Allahabad High Court held that any amount deposited during the pendency of the adjudicating proceedings or investigation is in the nature of a deposit under protest and, therefore, the principles of unjust enrichment would not be attracted. In coming to this conclusion, the Allahabad High Court placed reliance upon the decision of the Madras High Court in Pricol Ltd. 19. The aforesaid decisions of the Madras High Court and the Allahabad High Court in Pricol Ltd. and EBIZ. Com Pvt. Ltd. were followed by the Allahabad High Court (Lucknow Bench) in Com....
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....it is not in dispute that the Appellant had deposited Rs. 1 Crore when the raid was conducted on 6 October, 2003 and subsequently an amount of Rs. 11,36,840/- on 27 October, 2003. Both the amount were deposited much before the issuance of the show cause notice on 24 August, 2004. It is not in dispute that on the application filed by the Appellant for refund of this amount, the adjudicating authority did sanction the refund of Rs. 1,11,36,840/- but it directed the said amount to be deposited in the Consumer Welfare Fund because of the principles of unjust enrichment. This Order was upheld by the Commissioner(Appeals) for the same reason. This view is apparently contrary to the consistent view of the High Courts and the Tribunal. The Appellant would, therefore, be clearly entitled to the refund of Rs. 1,11,36,840/-. 23. An important issue, however, will arise and which needs to be examined. This concerns the allegation of the Department that the Appellant had collected service tax from the consumers during the period in question but had not deposited it with the Government. Though the Appellant has vehemently contended that only 'service charges' were collected towards administrati....