TaxTMI 
TaxTMI 
2026 (3) TMI 750
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....20.6.2012 (entry no. 12A) up to 1.4.2015 when this exemption was withdrawn. Again, by Notification No. 6/2015-ST dated 1.3.2015, the services were exempted retrospectively. The case of the appellant is that the services rendered by the appellant to MES during the relevant period were also exempted and the amount needs to be refunded. 3. There is no dispute between the Revenue and the appellant that the appellant was entitled to the refund on merits. There is also no dispute that the appellant had passed on the burden of the service tax to MES. 4. What was held in the impugned order and which is the case of the department is that as the one who has borne the burden of service tax, MES could have applied for refund and not the appellant. The appellant applied for refund, which, it had passed on to the MES, with a No Objection Certificate (NOC) from the MES. According to the Revenue, the NOC from MES has no legal validity and therefore, refund cannot be sanctioned to the appellant, who had paid the duty and passed on the burden to the MES, instead of to MES, who had borne the duty. 5. It must be pointed out that the Assistant Commissioner had, initially sanctioned refund of R....
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....nt applied for refund with an NOC from the MES. This NOC has no legal standing. He further submitted that the question of unjust enrichment has been discussed at length by a nine- member Constitutional bench of Hon'ble Supreme Court in Mafatlal Industries Ltd. versus UOI [1997 (89) E.L.T. 247 (S.C.)] He submits that in this judgment, it was decided that all claims for refund except where levy is held to be unconstitutional, to be preferred and adjudicated upon under section 11B of Central Excise Act, 1944 or under section 27 of the Customs Act, 1962 and subject to claimant establishing that burden of duty has not been passed on to third party. He, therefore, submitted that the appeal may be dismissed and the impugned order may be upheld. 10. I have considered the submissions advanced by both sides and perused the records. The facts are not in dispute. The appellant was entitled to refund on merits but it had already collected the amount paid as service tax from MES. Instead of claiming refund as the one who had borne the burden, MES issued an NOC to the appellant to claim the refund. The question is whether in such a case, refund can be sanctioned ignoring the provisions of unju....
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....paid to him? 16. A plain reading of section 11B of the Excise Act shows that there is a rebuttable presumption that the burden of duty (or service tax) has been passed on to the customer/client and therefore, the mandate is to credit to the Consumer Welfare Fund any amount that is sanctioned as refund. If and only if the claimant can establish that the burden has not been passed, will the refund be given to the claimant instead of crediting it to the consumer welfare fund. Refund can be rejected only if it is not payable on merits or on limitation but not on grounds of unjust enrichment. Section 11B of the Excise Act reads as follows: "SECTION 11B. Claim for refund of duty and interest, if any, paid on such duty. - (1) Any person claiming refund of any duty of excise and interest, if any, paid on such duty may make an application for refund of such duty and interest, if any, paid on such duty to the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise before the expiry of one year from the relevant date in such form and manner as may be prescribed and the application shall be accompanied by such documentary or other evidence (including the d....
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.... 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. (3) Notwithstanding anything to the contrary contained in any judgment, decree, order or direction of the Appellate Tribunal or any Court or in any other provision of this Act or the rules made thereunder or any other law for the time being in force, no refund shall be made except as provided in sub-section (2). (4) Every notification under clause (f) of the first proviso to subsection (2) shall be laid before each House of Parliament, if it is sitting, as soon as may be after the issue of the notification, and, if it is not sitting, within seven ....
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....fixed by the Central Government by notification in the Official Gazette in full discharge of his liability for the duty leviable on his production of certain goods, if after the manufacturer has made the payment on the basis of such rate for any period but before the expiry of that period such rate is reduced, the date of such reduction; (e) in the case of a person, other than the manufacturer, the date of purchase of the goods by such person; (ea) in the case of goods which are exempt from payment of duty by a special order issued under sub-section (2) of section 5A, the date of issue of such order; (eb) in case where duty of excise is paid provisionally under this Act or the rules made thereunder, the date of adjustment of duty after the final assessment thereof; (ec) in case where the duty becomes refundable as a consequence of judgment, decree, order or direction of appellate authority, Appellate Tribunal or any court, the date of such judgment, decree, order or direction;] (f) in any other case, the date of payment of duty". 17. Therefore, the impugned order cannot be sustained insofar as the rejection of refund is concerned. The....
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....hort paid or erroneously refunded for the subsequent period, on the person chargeable to service tax, then, service of such statement shall be deemed to be service of notice on such person, subject to the condition that the grounds relied upon for the subsequent period are same as are mentioned in the earlier notices."; 2) The Central Excise Officer shall, after considering the representation, if any, made by the person on whom notice is served under sub-section (1), determine the amount of service tax due from, or erroneously refunded to, such person (not being in excess of the amount specified in the notice) and thereupon such person shall pay the amount so determined. XXX (2A) Where any appellate authority or tribunal or court concludes that the notice issued under the proviso to sub-section (1) is not sustainable for the reason that the charge of,- (a) fraud; or (b) collusion; or (c) wilful misstatement; or (d) suppression of facts; or (e) contravention of any of the provisions of this Chapter or the rules made thereunder with intent to evade payment of service tax, has not been established against the pers....
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.... (e) contravention of any of the provisions of this Chapter or of the rules made there under with intent to evade payment of service tax. (4A) Notwithstanding anything contained in sub-section (4), where during the course of any audit, investigation or verification, it is found that any service tax has not been levied or paid or has been short levied or short-paid or erroneously refunded, but the true and complete details of transactions are available in the specified records, the person chargeable to service tax or to whom erroneous refund has been made, may pay the service tax in full or in part, as he may accept to be the amount of tax chargeable or erroneously refunded along with interest payable thereon under section 75 and penalty equal to one per cent. of such tax, for each month, for the period during which the default continues, up to a maximum of twenty-five per cent. of the tax amount, before service of notice on him and inform the Central Excise Officer of such payment in writing, who, on receipt of such information, shall not serve any notice under sub-section (1) in respect of the amount so paid and proceedings in respect of the said amount of service ....