No Unjust Enrichment when assessee initially charged Duty/Service Tax,Refund allowable: CESTAT [Read Order]

Unjust - Enrichment - Duty - Service - Tax - Refund - CESTAT - TAXSCAN

The Ahmedabad Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that refund is allowable in absence of unjust enrichment since the assessee initially charged duty/service tax.

Chowgule Brothers Private Limited, the appellant initially charged the service tax to the customers but subsequently returned the same by issuing the credit noteto the customers. The Commissioner (Appeals) held that sales tax even though paid subsequently, the same is a permissible deduction. And excise duty attributed to the said sales tax amount is refundable. Further held that since the full invoice value was recovered by the appellant from the buyer, the incidence of duty stands passed on. The refund should be credited to Consumer Welfare Fund.

In the case of Addison & Co Ltd. (supra)it was held that if the credit note is issued in respect of duty already paid to the buyer, the incidence of such duty does not stand passed on to any other person.

A Coram comprised of Mr Ramesh Nair, Member (Judicial)  and Mr Raju, Member (Technical) observed that the appellant has issued a credit note in respect of duty attributed to the sales tax amount. Therefore, the incidence of the same has not been passed on to any other person. Accordingly, a refund is not hit by the mischief of unjust enrichment. The appellant is entitled toa refund. 

In light of the decision, the Coram held that unjust-enrichment does not exist in the casewhere the assessee initially charged duty/service tax andsubsequently issued the credit note for the same. The Tribunal held the assessee entitled to the refund claim and set aside the impugned order.

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