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Commissioner of Central Excise, Nashik Versus Raymond Ltd.

Denial of refund claim - Unjust enrichment - respondent discharged the service tax liability under protest - Held that:- If the revenue authorities were not inclined to accept the chartered accountant content certificate, they should have adduced some evidence that the incidence of duty has been passed on nor any further clarification was sought from respondent or their CA. Feeble attempt is made in the grounds of appeal to state that it is not clear as what records were checked by the chartered .....

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firmity in the impugned order - Decided against Revenue. - Appeal No. ST/89433/14- Mum - Dated:- 23-6-2015 - Hon ble Mr. M.V. Ravindran, Member (Judicial),J. For the Appellant : Shri S.V. Nair, Supdt. (AR) For the Respondent : Shri Prasad Paranjape, Advocate ORDER This appeal is directed against Order-in-Appeal No. NSK-EXCUS-000-APP-25-14-15 dated 09.07.2014. 2. The issue involved in this case is regarding an amount of refund of ₹ 24,86,657/- to the respondent assessee. Revenue is in appea .....

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issued demanding service tax and interest thereof and for imposition of penalty. The respondent discharged the service tax liability under protest and contested the issue on merits before the higher judicial fora. After protracted litigation in the matter the Tribunal vide final order no. A/1456-1457/13 dated 04.04.2013 had allowed the appeal of respondent and held that they are not liable to pay the service tax and directed the lower authority to refund the amount after deciding the issue of u .....

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rough the facts of the case, would submit that the issue has not been considered by the first appellate authority correctly. It is his submission that the first appellate authority has not considered the fact that due to retrospective amendment the service tax liability needs to be discharged by the respondent assessee. He would try to take me through the history of the taxability on goods transport operators and submit that once the service tax liability arises, it needs to be discharged and wa .....

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mission that once an amount is shown as expenses it automatically enters into pricing of the products though it may not form part of costing because of some accounting standards or statutory obligations. It is his submission that the respondent should have shown the said amount as assets or as deposits or as receivables in the books of accounts. It is his submission even if the price of the final product does not change, it does not mean that the amount which is shown as expenses is not part of .....

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s his submission that the certificate is very clear as to the treatment given for the amount debited in expenses. He would specifically draw my attention to the findings recorded by the first appellate authority and submit that there is a categorical finding that the amounts deposited towards purported tax liability was not recoverable from the customers of steel division. He would also submit that the amount paid by the respondent was much after the divesting of steel division. He would submit .....

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dent s same case. 8. First appellate authority while allowing the appeal filed by the respondent held that they have passed the hurdle of unjust enrichment. The findings of the first appellate authority are as under: In this case it could be all the more difficult for the appellant to pass on the Service Tax burden by enhancing the price of goods or Services relating to their other Divisions as their concerned steel unit had been divested long back in 2000-2001 itself. Deputy Commissioner has al .....

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; Co., have also examined the records of the appellant and have clearly certified that they have not passed on the Service Tax burden to any third person but it has been borne by the appellant only. This certificate was also placed before her and its veracity has not been contradicted by giving any sound reason. She has just stated that Chartered Accountant's certificate is not binding which is not enough. However, after having considered all the above referred facts and reasons, I do not ha .....

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other relevant material as discussed above. If no distinction is drawn between presumption and conclusion and both are construed synonymously, no refund can be admissible in any case even when such expenditure is absorbed in their profit and not passed on to the customers through the price of goods or services. 9. As against such a factual findings it is seen from the grounds of appeal that there is no rebuttal nor any contrary evidence has been produced. The certificate issued by the chartered .....

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ant is an expert and as can be seen from the above reproduced certificate, he has verified the records and then came to a conclusion that incidence of tax is not passed on. 11. I find that that this bench in the case Birla Corporation Ltd case (supra) held as under: 5. As regards the plea of the appellants that the doctrine of unjust enrichment will not apply in the case when the inputs were not received by them, I am in agreement with the plea raised by ld. DR that unless the appellant establis .....

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Commissioner (Appeals) has rejected the Chartered Accountant certificate by just stating that there is no specific mention in the certificate that incidence of duty has not been passed on to any other customers and the certificate is vague. I do not agree with the contention of the ld. DR that once the amount has been shown as expenses in the profit and loss account, it has to be presumed that the incidence of duty has been passed on to the customers as this is not sufficient as has been held by .....

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e so I hold that Chartered Accountant certificate is clear that such amounts are not passed on to the customer and I accordingly hold that incidence of duty has not been passed on to the customers. In view of this refund cannot be credited to the Consumer Welfare Account and the appellants are entitled to the same. I accordingly, set aside the order of Commissioner (Appeals) and allow the appeal with consequential relief. (Emphasis supplied) 12. On the issue of unjust enrichment, of the service .....

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