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TMI Blog2023 (2) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... izers. Such technical information was in the form of designs, flow drawings, vessel sketches, operating philosophy and material specifications along with other details. 3. A show cause notice for demand of service tax was issued to the appellant on 28.07.2008 proposing recovery of Rs. 1,42,79,138/- on license fee paid to foreign parties for import of technical know-how and engineering design license alleging that the appellant had imported 'intellectual property rights' service, which was susceptible to service tax in the hands of the appellant. The demand of service tax was confirmed by the Commissioner by order dated 26.04.2010. An appeal was filed by the appellant before the Tribunal bearing Service Tax Appeal No. 1037 of 2010 and an amount of Rs.1,26,59,954/- was deposited by the appellant under protest. The appeal was ultimately allowed by the Tribunal by order dated 22.07.2016. It was held that no service tax was payable on import of technical know-how and engineering design license as they were not intellectual rights recognized under any law in India. 4. Pursuant to the order of the Tribunal, the appellant filed claims for refund on 03.08.2016 and 08.08.2016 for an amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Learned authorised representative also submitted that unjust enrichment means passing not only of duty directly to another person but also indirectly. 10. The submissions advanced by the learned counsel for the appellant and the learned authorised representative for the department have been considered. 11. It transpires that in 2008, the service tax department had initiated proceedings against the appellant and issued a show cause notice proposing to demand service tax on services imported by the appellant from foreign companies. The department was of the view that designs, drawings and technical know-how received by the appellant from foreign companies qualified as intellectual property rights services, and when imported, these services were subject to levy of service tax in the hands of the appellant on reverse charge mechanism in terms of section 66A of the Finance Act. The appellant, on the other hand, contested the demand on the ground that technical know-how, designs and drawings did not qualify as intellectual property rights services as these intellectual property rights were not recognized under any law in force in India. After filling an appeal before the Tribunal ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he nature of deposit made under protest and, therefore, the principles of unjust enrichment would not apply when a refund is claimed for this amount. The relevant portion of the judgement of the High Court is reproduced below: "7. The first question of law, which is raised, relates to the plea of unjust enrichment and much emphasis is laid on the decision of the Supreme Court in Mafatlal Industries case (1997 (89) ELT 247 (SC)). Relevant portion of the order passed by the Supreme Court in Mafatlal Industries case (supra) has been extracted in the grounds (b) and (c). There is no dispute with regard to the proposition of law as laid down by the Supreme Court. In the present case, as is evident from the records, it is not a case of refund of duty. It is a pre-deposit made under protest at the time of investigation, as has been recorded in the original proceedings itself. In this regard, it has to be noticed it has been the consistent view taken by the Courts that any amount, that is deposited during the pendency of adjudication proceedings or investigation is in the nature of deposit made under protest and, therefore, the principles of unjust enrichment does not apply. The above s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quiring the assessee to explain why the refund claim should not be rejected for the reason that it had not been made within one year. No order was passed and, therefore, a writ petition was filed in the Allahabad High Court. The Allahabad High Court examined the provisions of Section 11AB of the Central Excise Act, 1944, which contemplates that the amount shall be refunded to the assessee provided the incidence of such duty had not been passed on by him to any other person. The Allahabad High Court held that any amount deposited during the pendency of the adjudicating proceedings or investigation is in the nature of a deposit under protest and, therefore, the principles of unjust enrichment would not be attracted. In coming to this conclusion, the Allahabad High Court placed reliance upon the decision of the Madras High Court in Pricol Ltd. 14. The aforesaid decisions of the Madras High Court and the Allahabad High Court in Pricol Ltd. and EBIZ. Com Pvt. Ltd. were followed by the Allahabad High Court in Commissioner of Central Excise, Lucknow Vs. Eveready Industries India Ltd [2017 (357) E.L.T. 11]. 15. This issue was also examined by the Tribunal in Commissioner of Custo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been rejected on the ground that in 2006-07, the amount deposited was accounted as 'expense' in the Profit and Loss account of the appellant, meaning thereby that the burden of duty had passed. 18. The method of accounting followed by an assessee does not impact the admissibility of refund, and cannot be made a basis to hold that the incidence of duty had passed. In this regard, reliance can be placed on the decision of the Tribunal in Commissioner of Customs, ACC Import Commissionerate, New Customs House, New Delhi vs. UT Electronics Private Limited [2020-TIOL-386-CESTAT, Delhi]. The Tribunal held that merely because the excise duty is booked as 'expenditure' in Profit and Loss account, it cannot be said the incidence of duty had passed. A similar view was taken by the Tribunal in Allied Chemicals & Pharmaceutical Private Limited vs. CCE & ST, Jaipur-I [2019 (2) TMI 849- CESTAT New Delhi]. In any case, the entry made by the appellant of the amount in 2006-07 was neutralized by the appellant in 2016-17, when the appellant booked the same amount as 'recoverable' in its books under the head 'current assets', after the appeal was allowed by the Tribunal. 19. It further needs to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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