TMI Blog2017 (12) TMI 1032X X X X Extracts X X X X X X X X Extracts X X X X ..... st the appellant on the question of unjust enrichment - appeal allowed - decided in favor of appellant. - Service Tax Appeal No.52880 of 2016 - ST/A/58469/2017-CU[DB] - Dated:- 20-12-2017 - Shri Dr. Satish Chandra, President And Shri B. Ravichandran, Member (Technical) S/Shri Sujit Ghosh, Pragya Awasthi, Rarrah Gujar, Advocates for the appellant Ms. Neha Garg, Authorized Representative (DR) for the respondent ORDER Per. B. Ravichandran The appellant is a joint venture company between Italian Thai Development Public Limited (ITD) and ITD Cementation India Limited. The appellant was awarded a contract for execution of civil work for DMRC on 05/09/2007. To execute the said contract, the appellant entered into a lease agreement dated 21/11/2007 with ITD Thailand for leasing and importing 4 tunnel boring machines from Thailand. The appellant paid service tax on reverse charge basis under the category of supply of tangible goods for use for leasing these tunnel boring machines. They have paid service tax of ₹ 11,25,05,830/-. Later they realized that service tax is not liable to be paid on such lease transaction and filed a claim for refund on 28/0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s relied upon by the appellant. To begin with we note that when the claim for refund was filed the Original Authority decided the admissibility of the claim vide his order dated 11/04/2013. The Original Authority recorded as below :- 12. Now on the issue (d) above, whether the refund claim is affected under unjust enrichment or otherwise, I observe that the principle of unjust enrichment in tax jurisprudence implies the retention of a benefit by a person retains money or benefit which is in justice, equity and good conscience, belong to someone else. Thus no person can be allowed to enrich inequitably at the expense of another. A right of recovery under doctrine of unjust enrichment arises when retention of a benefit is considered contrary to justice or against equity. As per clause 3.5 of the agreement, The payments are to be exclusive of Value Added Tax or any national federal or local service tax levied by the tax authority of India. Such taxes shall include, but not be limited to, corporate taxes, taxes on equipment of the lease of equipment, import and export duties, withholding taxes and taxes on personnel. Pursuant to this Agreement, should any such taxes o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unjustly if the amount of claim is refunded. Hence, the principle of unjust enrichment as prescribed under Section 11B is also not satisfied in this case . We find that such conclusion is contrary to the factual finding recorded in the previous paragraph in the said order. In other words, it would appear that while the appellant has not transferred the burden of service tax to any person, still will be enriched by the sanction of refund, is the conclusion drawn by the Original Authority which, to put it simply, is absurd. 4. After the above-mentioned original order, the matter travelled further up to the Tribunal only on the issue of merit. The Commissioner (Appeals) vide order dated 29/01/2014 deciding on merits of the case categorically held that the appellants are eligible for refund and directed the Jurisdictional Assistant Commissioner to sanction the instant refund claim after verifying the relevant documents. On further appeal by the Revenue, the Tribunal vide order dated 27/01/2015 upheld the order of Commissioner (Appeals) by dismissing the appeal by Revenue. The Original Authority proceeded to sanction the refund in pursuance of such direction. However, he credited the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... complete bifurcation of agreed contract price wherein service tax amount was never contemplated. 8. We find that the reliance of the lower Authorities on the phrase inclusive of tax in the contract to hold that the appellants collected service tax is legally unsustainable. The Hon ble Supreme Court in Deputy Commissioner of Commercial Taxes Vs. Hindustan Lever Ltd. (2016) 13 SCC 28 dealing with the sales tax matter held that when the respondent was not liable to pay tax and had not passed on the tax liability, sale consideration should not be fabricated and denied on the basis of any assumption that the sale price received must have included the tax. This fiction has no application in the facts of the said case. The Apex court further held that there is neither such principle nor any percept in law. In PSL Limited vs. CCE, Rajkot (2005) SCC Online CESTAT 2508, the Tribunal held that if the contract price is stated to be inclusive of excise duty it does not mean that the same has been collected from the customer. The Tribunal in CIMMCO Ltd. vs. CCE, Jaipur 1999 (107) E.L.T. 246 (T) held that the clause inclusive of duty is put in a contract/work order only in our ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which Revenue held as attributable to tax. In Prabhu Dayal Kanojiya Vs. CCE, Jaipur - 2014 TIOL 1279 CESTAT DEL. , the Tribunal dealing with provisions of Section 73A which are parallel to the principle of unjust enrichment held as below :- 5. Section 73A of the Act enumerates provisions for liability to remit service tax collected by a person. Subsection (2) of this provision enacts: where any person, who has collected any amount, which is not required to be collected, from any other person, in any manner, as representing service tax, such person shall forthwith pay the amount so collected to the credit of the Central Government. On a true and fair construction of this provision, the legislative intent is clear. The conditions precedent for ordering any person to remit (an amount collected as service tax, which is not required to be so collected), is a finding of fact that the person had in fact collected an amount towards service tax even though no service tax liability arises under the transaction qua which such collection is made. This finding of fact must be recorded by the Revenue. The liability to remit service tax under Section 73 A (2) does not arise on th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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