2017 (6) TMI 626 - AT - Central Excise

Refund claim - denial on account of time bar - Held that - the appellant is not taken CENVAT credit of service tax paid to the loan licensee and the said service tax has shown in their balance sheet recoverable from the department - the appellant has passed the bar of unjust enrichment and is entitled for refund - appeal allowed - decided in favor of appellant.

Summary

Issues:
Refund claim rejection based on unjust enrichment.

Analysis:
The appellant, engaged in manufacturing medicaments, had goods manufactured on loan licensee who paid service tax under Business Auxiliary Services. Subsequently, it was determined that the activity amounted to manufacture, not subject to service tax. The appellant reversed the cenvat credit with interest and filed a refund claim, rejected for unjust enrichment by lower authorities. The appellant argued non-availment of credit and maintained selling price consistency post-job work, passing unjust enrichment. The appellant's books and CA certificate supported this. The respondent contended lack of evidence on duty burden not passed to buyers. Upon hearing both sides, it was found that the final goods' price remained unchanged pre and post job work, and the appellant had reversed the service tax credit. Citing the Hello Minerals Water case, it was held that the appellant did not avail the credit, showing recoverable service tax in their balance sheet, passing the unjust enrichment test. Consequently, the refund was granted, and the impugned order was set aside, allowing the appeal with consequential relief.