TMI Blog2016 (3) TMI 205X X X X Extracts X X X X X X X X Extracts X X X X ..... - Appellant contended that it was neither a manufacturer of goods nor was it providing any service (which utilized the impugned service) during the relevant period and no Cenvat credit was taken of the service tax, the refund of which was sought and therefore the presumption contained under Section 12B of the Central Excise Act made applicable to Service Tax Act do not apply - Held that: every refund has to be tested on the yardstick of the doctrine of unjust enrichment in terms of Section 11B of Central Excise Act read with Section 83 of the Finance Act, 1994. Here as per Section 12B ibid the appellant do not cover within the scope of this section. The refund in this case is arising on account of the fact that the effective date of merger/amalgamation is to be treated as 1.4.2007 making service rendered during the relevant period for which royalty was paid as service to self. As the service was rendered to self and service tax was paid thereon, burden can only passed on to self and passing on the burden to self is not tantamount to passing it to any other person. Therefore, the appellant is not hit by the doctrine of unjust enrichment. - Decided in favour of appellant - No. ST/St ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h effect from 1.4.2007 it amounted to rendition of service to self and therefore no service tax was payable during the said period. It also stated that there was no unjust enrichment as has been certified by the Chartered Accountant and no Cenvat credit was taken of the service tax the refund of which was sought. The Commissioner (Appeals) came to a finding that Registrar of Companies, National Capital Territory of Delhi Haryana, Ministry of Company Affairs, issued to the appellant its approval for change of name of JEW to Usha International Ltd. from 20.6.2008 and therefore up to that date the rendition of service cannot be termed as service to self and the service tax was correctly payable/paid and so no refund was admissible. Appeal No. ST/58043/2013 is against the said order in appeal. Appeal No. ST/56974/2013 is against order in original dated 16.1.2013 which was issued confirming demand of ₹ 71,74,496/- erroneously refunded earlier along with penalties under Sections 77 and 76 of the Finance Act, 1994. 4. Ld. Advocate for the appellant has contended that : (i) As per the scheme of arrangement between JEW and Usha International appointed date/transfer date fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore service tax was payable and correctly paid by it. (ii) The onus is on the appellant to show that the burden was not passed on and such onus has not been discharged by the appellant. (iii) The fact that the prices of electric fan/sewing machine did not go down post merger (from 1.4.2007) clearly shows that the burden was passed on to the customers. 6. We have considered the contentions of both sides. We find that as per the scheme of arrangement between JEW and Usha International and Shiv Industries, appointed date or transfer date with regard to agreement/merger was stipulated in para 1 part 1.3 of the said scheme of arrangement. It stated as under: 1.3 Appointed date or Transfer Date means first day of April 2007 or such other date(s) as the Hon ble High Court may direct: . We find from the order of the Hon ble High Court that it did not direct appointed date or transfer date to be any different date from 1st April 2007. We find that para 8.1 of the said scheme of arrangement states as under ; 8.1 The Transferor Companies shall carry on and be deemed to carry on all its business and activities and stand possessed of its properties ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion. In the scheme before us, clause 6(b) does expressly provide that with effect from the transfer date, the Transferor Company (Subsidiary Company) shall be deemed to have carried on the business for and on behalf of the Transferee Company (Holding Company) with all attendant consequences. It is equally relevant to notice that the courts have not only sanctioned the scheme in this case but have also not specified any other date as the date of transfer/amalgamation. In such a situation, it would not be reasonable to say that the scheme of amalgamation takes effect on and from the date of the order sanctioning the scheme. We are, therefore, of the opinion that the notices issued by the Income Tax Officer (impugned in the writ petition) were not warranted in law. The business carried on by the Transferor Company (Subsidiary Company) should be deemed to have been carried on for and on behalf of the Transferee Company. This is the necessary and the logical consequence of the Court sanctioning the scheme of amalgamation as presented to it. The order of the Court sanctioning the scheme, the filing of the certified copies of the orders of the Court before the Registrar of Companies, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... you are bidden to treat an imaginary state of affairs as real, you must surely, unless prohibited from doing so, also imagine as real the consequences and incidents which, if the putative, state of affairs had in fact existed, must inevitably have flowed from or accompanied it.... The statute says that you must imagine a certain state of affairs; it does not say that having done so, you must cause or permit your imagination to boggle when it comes to the inevitable corollaries of that state of affairs. 16. In the instant case the subsidiary company got merged/amalgamated with the holding company with effect from April 1, 1995, though, as a matter of fact, it continued to exist for sometime more. Therefore, whatever sale of goods that took place between the subsidiary company and the holding company in the interregnum between the sanctioned date of amalgamation and the factual date of amalgamation by virtue of the fiction created under the law of amalgamation, as rightly pointed out both by the assessing authority and by the Tribunal, is only a transfer of stock of one branch of the holding company to another branch. The declaration of the law made by the Supreme Court i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hall, unless the contrary is provided by him, be deemed to have passed n the full incidence of such duty to the buyer of such goods. It is evident from the words of the Section 12B ibid that the appellant was not covered within the scope of the said section and therefore the contention of the appellant that presumption of having passed on the incidence of duty does not arise in its case has some merit. However we find that sub section 2 of Section 11B of the Central Excise Act states as under: (2) If, on receipt of any such application, the [Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise] is satisfied that the whole or any part of the [duty of excise and interest, if any, paid on such duty] paid by the applicant is refundable, he may make an order accordingly and the amount so determined shall be credited to the Fund : Provided that the amount of [duty of excise and interest, if any, paid on such duty] as determined by the [Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise] under the foregoing provisions of this sub-section shall, instead of being credited to the Fund, be paid to the applicant, if suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... put it differently the expression incidence of such duty in relation to its being passed on to another person would take it within its ambit not only the passing of the duty directly to another person but also cases where it is passed on indirectly. This would be a case where the duty paid on raw material is added to the price of the finished goods which are sold in which case the burden or the incidence of the duty on the raw material would stand passed on to the purchaser of the finished product. It would follow from the above that when the whole or part of the duty which is incurred on the import of the raw material is passed on to another person then an application for refund of such duty would not be allowed under Section 27(1) of the Act. It is evident from the aforesaid Supreme Court judgement in the case of Solar Pesticides Pvt. Ltd. that the incidence of duty need not necessarily be passed on as duty. However if the legal presumption enshrined in Section 12B is not attracted in a case of refund, then it cannot be insisted that the rigor of evidence required to be given by the applicant to show that it did not pass on the burden to satisfy the requirement of Section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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