The Customs, Excise, and Service Taxes Appellate Tribunal (CESTAT), directed the Adjudicating Authority to examine in respect of the credit of refund amount to Consumer Welfare Fund.
The appellant, M/s Rakesh Canteen Contractor has been awarded the canteen services contract from M/s Caparo Engineering India Limited, by way of running and managing their canteen located in their factory premises.
The only issue involved in the appeal is that initially M/s Caparo Engineering India Limited paid the service tax to the appellant i.e. service provider and later on the assumption that the said service is exempt, have deducted the amount of service tax admittedly from the subsequent bills of the appellant, which has been reflected in the ledger account of this appellant maintained in the books of M/s Caparo Engineering India Limited.
The refund has been rejected on the presumption that the service tax burden must have been passed on to the workman/ staff of M/s Caparo Engineering India Limited (users of the canteen).
The Counsel appearing for the appellant stated that such presumption of having passed on the burden of service tax to the users of the canteen is not available under the provision of service tax. It is further urged that the food has been provided at a subsidized rate in the canteen for the workers/staff of M/s Caparo Engineering India Limited, as per the agreement between the appellant and M/s Caparo Engineering India Limited.
The coram of Anil Choudhary found that the appellant has not led evidence that there was no passing of the service tax burden to the end-users of the canteen.
The CESTAT allowed the appeal by way of remand to the Adjudicating Authority with the direction to examine the agreement between the appellant and M/s Caparo Engineering India Limited, as well as other relevant documents like costing of food, price charged from the end users.
“If it is found that the company M/s Caparo Engineering India Limited have not passed on the burden of the service tax to their employees/ workers, the amount of refund shall be paid to the appellant,” the CESTAT said.
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