2008 (7) TMI 82 - AT - Service Tax

Refund - excess payment revenue contend that as per Board s Circular dated 16.3.2007 powers of sanctioning refund has been given to proper officer having jurisdiction over centralized registration since Circular has been issued subsequent to the period involved in this case refund can be sanctioned by Commissionerate in which tax is paid in respect of unjust enrichment verification of some relevant document is sufficient - refund can t be rejected on any of the above ground

Summary

Issues Involved:
1. Eligibility for refund of excess service tax paid.
2. Jurisdiction for filing the refund claim.
3. Applicability of the principle of unjust enrichment.
4. Adequacy and admissibility of evidence for refund claim.
5. Compliance with procedural requirements for refund claims.

Detailed Analysis:

1. Eligibility for Refund of Excess Service Tax Paid:
The core issue in the appeal was whether the appellant was eligible to claim a refund of excess service tax paid on billed amounts that were not realized due to defaults by credit card holders. The appellant had paid service tax based on billings instead of actual collections, resulting in excess payments. According to service tax provisions, tax is payable on the gross amount realized, not on the billed amount. The appellant claimed refunds under Section 11B of the Central Excise Act, 1944, asserting that they had paid excess service tax. The Tribunal upheld the appellant's claim, noting that the service tax was paid on billed amounts, which were not realized, and therefore, the excess payment was refundable.

2. Jurisdiction for Filing the Refund Claim:
The Revenue contended that the appellant, registered in Mumbai, should have filed the refund claim there, despite making service tax payments in Bangalore. The Tribunal rejected this argument, stating that the Board's Circular dated 16.3.2007, which mandated centralized jurisdiction for refund claims, came into effect after the period in question. Thus, the Tribunal found that the appellant's filing of the refund claim in Bangalore was appropriate for the period involved.

3. Applicability of the Principle of Unjust Enrichment:
The Revenue argued that the principle of unjust enrichment barred the refund claim, asserting that the incidence of duty was passed on to customers. However, the Tribunal noted that the Commissioner (Appeals) had thoroughly examined the issue and concluded that the principle of unjust enrichment did not apply. The Tribunal referenced previous decisions, including those in similar cases involving the appellant, which established that service tax is payable on realized amounts, not billed amounts. Therefore, if the amount was not realized, the service tax paid on it was considered excess and refundable.

4. Adequacy and Admissibility of Evidence for Refund Claim:
The appellant provided electronic evidence, including a compact disc (CD) containing data of credit card transactions, and certificates from chartered accountants verifying the refund amounts. The lower authority had denied the refund, citing insufficient evidence without specifying what was lacking. The Tribunal found that electronic evidence was acceptable under relevant provisions and circulars, and the appellant had complied with documentary requirements. The Tribunal emphasized that the lower authority should have verified the evidence instead of outright rejecting it.

5. Compliance with Procedural Requirements for Refund Claims:
The appellant had duly filed the refund claim within the stipulated time, accompanied by necessary documentary evidence. The Tribunal noted that the appellant had followed the prescribed procedures for claiming the refund, including providing a certificate from auditors and maintaining detailed records of transactions. The Tribunal found that the appellant's compliance with procedural requirements supported their eligibility for the refund.

Conclusion:
The Tribunal confirmed the order of the Commissioner (Appeals) allowing the refund claim and rejected the Revenue's appeal. The Tribunal upheld the findings that the appellant was eligible for a refund of excess service tax paid, the claim was filed in the correct jurisdiction, the principle of unjust enrichment did not apply, and the evidence provided was adequate and admissible. The Tribunal's decision was consistent with previous rulings in similar cases involving the appellant and aligned with relevant legal provisions and judicial precedents.