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2016 (7) TMI 424 - AT - Service TaxRefund - Excess payment of service tax - Unjust enrichment - Acceptance of credit notes - recipients were entitled to cenvat credit or not - Commissioner of Central Excise (Appeals), Mumbai-I that has credited the refund of service tax claimed by the appellant to the Consumer Welfare Fund. - Held that:- Credit notes do not exist as inactive exhibits; the financial adjustment is manifested as entries in journals and ledger to impact the consideration made over and received for any goods supplied or service rendered. With credit notes being a conventional method of reflecting the change in consideration, and its authenticity not having been refuted, reliance has necessarily to be placed on the net effect that it has on the taxable transaction. Reversal of 'brokerage' carries with it the reversal of tax collected along with the excess 'brokerage.' We, therefore, need merely to ascertain if any of the cited decision prevent acceptance of credit note. The tax is structured entirely on the existence of documentation and alienation of credit or debit notes from this documentary flow by conferment of finality to one document that serves the cause of Revenue is not consistent with the basis of taxation in section 67 of Finance Act, 1994 viz. consideration for services rendered. The decisions cited by Revenue do not, therefore, serve to support the findings in the impugned order. The original authority had not sought to reject the claim for refund on the ground of lack of evidence that CENVAT credit, that the recipients were entitled to, had been reversed. Therefore, invoking of this ground in the impugned order is tantamount to travelling beyond the show cause notice. The manner in which credit is administered is not within the obligatory supervision of the provider of service or supplier of goods. The system is 'honor-driven' by predicating the availment on supporting documentation with the onus of reversals placed squarely on the recipient. The issuance of credit note automatically curtails the entitlement and their existence suffices to enforce reversal in the course of scrutiny of returns or audit. In view of implicit reduction of entitlement to credit, with ample recourse for recovery under the Rules, assumption of having passed on the burden of tax fails to be a valid conjecture. The provisions of section 11B of Central Excise Act, 1944 cannot be stretched to fasten what is, essentially, the monitorial responsibility of tax authorities on to an assessee. The impugned order has erred in crediting the excess tax collected in the Consumer Welfare Fund - Refund allowed.
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