TaxTMI 
TaxTMI 
2023 (12) TMI 1070
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....mption was withdrawn by notification no. 6/2015 dated 1.3.2015 effective from 1.4.2015. Later, the exemption was restored retrospectively by inserting section 102 of the Finance Act, 1994 Finance Act by Finance Act, 2016. This Section also provided for refund of service tax if paid under a contract entered into before 1st March 2015. It also required that a refund application for it must be made within six months from the date on which the Finance Act, 2016 receives assent of the President of India. This section reads as follows: "SECTION 102. Special provision for exemption in certain cases relating to construction of Government buildings. (1) Notwithstanding anything contained in section 66B, no service tax shall be levied or collected during the period commencing from the 1st day of April, 2015 and ending with the 29th day of February, 2016 (both days inclusive), in respect of taxable services provided to the Government, a local authority or a Governmental authority, by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation or alteration of-- (a) a civil structure or any other original works meant predominantly ....
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....s, taxes, royalties and other levies. He further observed that at the time of bidding, there was no service tax exemption and therefore, the price quoted by the appellant was inclusive of service tax. He, therefore, held that the appellant had indirectly passed on the burden of service tax. Thus, holding, the Commissioner (Appeals) held that the unjust enrichment clause would apply to this case and the amount of refund sanctioned should have been credited to the Consumer Welfare Fund instead of paying to the appellant. He placed reliance of the judgment of Supreme Court in Union of India vs. Solar Pesticide Pvt. Ltd. 2000 (116) ELT 401(SC) in which it was held that the concept of unjust enrichment would also apply where the incidence of duty is passed on indirectly. 6. Learned counsel for the appellant submitted that the finding in the impugned order that it had indirectly passed on the burden to the government departments is not correct. The Commissioner (Appeals) recorded correctly that its contracts were inclusive of all duties and taxes but his statement that when it had submitted the bids there was no exemption from service tax is incorrect on the face of it. He submits that ....
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....uded in its invoice price, the service tax element. We are unable to agree with this finding because section 102 provides for refunds only if the contracts were signed prior to 1 March 2015. During that period, no service tax was payable because of exemption notification no. 25/2012-ST. So, we find it inconceivable that the appellant would have anticipated that the exemption from service tax would be withdrawn even before submitting its bids and would have included the service tax element in the bills. We find it impermissible to hold that the appellant had indirectly passed on the burden of the service tax to its client government departments. Once this anomalous and baseless presumption that the service tax would have been indirectly passed on by the appellant to its client government departments is removed, no basis remains for rejecting the refund claim or crediting it to the Consumer Welfare Fund. 10. The Commissioner relied on Solar Pesticide Pvt. Ltd. in which the Supreme Court held that the principle of unjust enrichment would apply not only where the imported goods (on which the duty has been paid) are sold but to also to such cases, where the imported goods are used by th....
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....e that even in cases of captive consumption, it should be possible for the importer to show and prove before the authorities concerned that the incidence of duty on the raw material, in respect of which refund is claimed, has not been passed on by the importer to any body else. 24. For the aforesaid reasons, we hold that the High Court has not correctly interpreted the relevant provisions of the Customs Act and, in our opinion, the principle of unjust enrichment incorporated in Section 27 of the Act would be applicable in respect of imported raw material and captively consumed in the manufacture of a final product. Whether the incidence of the duty had been passed on to the consumer was not decided by the High Court in Solar Pesticide's case (supra) because in its opinion the principle of unjust enrichment could not apply to the cases of captive consumption. In the case of Solar Pesticide Pvt. Ltd., therefore, we do not go into this question whether the incidence of duty had not been passed on by the respondent. This appeal is, accordingly, allowed and the impugned judgment of the High Court is set aside, the effect of which would be that the writ petition filed by the Solar Pes....