TMI Blog2016 (7) TMI 424X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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, assump ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prejudice the claim for refund; however, the appellate authority was not satisfied that credit notes were sufficient to establish that the tax burden had not been passed on to the recipients of the service. Accordingly, the first appellate authority held the refund to be due but credited the same to the Consumer Welfare Fund leading to this appeal before us. 4. Before we proceed to assess the rival contentions, we take note of one submission made by the learned Authorized Representative relying upon the decisions of the Hon'ble Supreme Court in CCE v. Mysore Electricals Industries Ltd. [2006 (11) TMI 202 - SUPREME COURT OF INDIA] and Thirumalai Chemicals Ltd v. Union of India 2011 (268) ELT 296 (SC). The thrust of the argument advanced thus was that the basis of assessment could be varied only with prospective effect. In like fashion, reliance was placed on the decision of the Tribunal in CCE v. EID Parry India Ltd. [2006 (8) TMI 616 - CESTAT CHENNAI] that duty paid pursuant to self-assessment was not refundable and in J.C.T. Ltd v. CCE [2005 (1) TMI 135 - CESTAT, NEW DELHI] holding that tax paid in excess could be recovered only through civil suit. It would appear that thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant on the ground that availment of CENVAT credit by the three clients amounts to unjust enrichment. Besides inviting attention to the decisions relied upon in the impugned order including those of the Hon'ble Supreme Court in Grasim Industries v. CCE 2011 (271) ELT 164 (SC) and Rajasthan Spinning Weaving Ltd. v. Collector 1999 (112) ELT All5 (SC), learned Authorized Representative relies upon S Kumar's Ltd. v. CCE [ 2003 (2) TMI 85 - CEGAT, NEW DELHI] , Sangam Processors (Bhilwara) Ltd. v. CCE 1991 (71) ELT 989 (Tri. - Delhi) and CCE v. Oriental Textiles Processing Co. (P.) Ltd. 2012 (276) ELT 257 (Tri-Delhi). 7. The refund claim preferred on 31st December 2007 for ₹ 1,44,63,046 relates to 'brokerage' collected in excess on business generated by three clients during the months of April to July 2007 and returned to them in accordance with terms of agreement entered into in April 2007. We have examined the credit notes dated 27th July 2007 and 31st August 2007 issued to M/s Crossborder Investments Pvt. Ltd, M/s Edelweiss Commodities Advisors Ltd and M/s ECL Finance Ltd acknowledging the liability of the appellant. In each, the difference in 'broker ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ii) Rajasthan Processors (India) Ltd. v. Collector [1994 (70) ELT A182] (iii) Orion Steel Corporation v. CCE, Vodadara [2010] (18) STR 237 (Tri. - Ahm) (iv) Sudhir Papers Ltd. v. CCE, Bangalore 2010 (18) STR 701 (Tri. - Chennai) 12. In view of the above case laws I hold that the principles of unjust enrichment are squarely attracted in this case. However the refund claim instead of being rejected should have been credited to the Consumer Welfare Fund. 9. That does not appear to be a proper finding as the entitlement for disbursement has been denied because 'the principles of unjust enrichment are squarely attracted in this case'. Indubitably, every feature of tax administration is rooted in well-grounded principles just as taxation is, itself, founded on such principles. The enunciation of such principles, and knowledge thereof, is no substitute for the express requirement to base every order on statutory provisions. 'Unjust enrichment' is undoubtedly repugnant to good governance but, laudable as such sentiment may be, specifics of statutory authorization must, necessarily, be the circumscribing limits rather than the elasticity inheren ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not episodic or discrete, for adjustment in ledgers with settlements effected at intervals. Merely because it has the form and appearance of script on paper it cannot be said to be unreliable. More so, in the present matter, when the contents are sufficiently elaborate to include the tax components and there is not a whit of challenge to its authenticity. A casual dismissal of this document was, therefore, not a valid option available to the lower authorities. In re, AK Spintex Ltd. (supra), the Hon'ble High Court of Rajasthan has unequivocally specified the pre-requisite for denying credence to such documentation furnished by assessees as evidence of consideration or of having borne the tax burden thus: '12. The question, then arise is, the question of fact, as to who is an ultimate person, who has borne the burden. Obviously, if it is established by the assessee, that the burden has not been passed on, or has been appropriately reversed, the ultimate person, who has suffered the burden, would be the assessee himself. 13. It is faced with this situation, that the submission made by the learned counsel for the revenue, was, that in the scheme of things, when the g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... redit notes as evidence of having borne the tax burden. Both S Kumar's Ltd. (supra) and Sangam Processors (Bhilwara) Ltd. (supra) dealt with refund of duty collected in excess owing to alteration of rates of duty. The dispute here relates to alteration of value of taxable service which has been adjusted through a standard instrument of commercial settlement and which, concomitantly, adjusted the tax collected in excess. Taxation of services is, in any case, on a different footing than duty of excise on manufacture as far as the taxable event is concerned. Service tax, being a 'destination-based tax' and being a tax on invisibles, is levied only upon issue of documentation, that makes the rendition of service apparent. 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. 11. We also notice that t ..... 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