The Mumbai bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that no unjust enrichment when the refund was advance paid as per sub rule (1a) of rule 6 of service tax rules and directed to issue a refund cheque.
M/s. Satyasai Human Resource Solutions, the appellant is registered with Service Tax Department. They were providing services to educational institutions. On 27.08.2013, the appellant filed one application for a refund of service tax of Rs.5,94,919/- with the jurisdictional Assistant Commissioner, claiming that they were providing services which were no more taxable as per exemption Notification No.25/2012-ST dated 20.06.2012 and therefore the said amount deposited by them with the exchequer on 05.10.2012 may be refunded.
The original authority held that the appellant was not eligible for the said exemption and the refund was hit by the doctrine of unjust enrichment. The Commissioner (Appeals) upheld the order-in-original and rejected the appeal.
It was submitted that in terms of serial No.9 of Notification No. 25/2012-ST dated 20.06.2012, all services provided to educational institutions were exempted. On 05.10.2012, the appellant paid Rs.5,94,919/- towards service tax through challan and subsequently filed the said refund claim. He further stated that the said amount of refund mentioned was a mistake and the correct amount of refund that should have been claimed by them was Rs.5,34,693/-.
The appellant filed a statutory ST-3 return for the period from July 2012 to September 2012 and claimed in the same return that they had paid Rs.5.34,693/- under sub-rule (1A) of Rule 6 of Service Tax Rules in Part-C of the said return claiming the said amount was paid as advance. He has also submitted that through the said return under column B1.9, they claimed Rs.43,26,000/- as the amount charged for exempted services.
He further stated that initially the invoices were issued charging service tax, but subsequently, revised invoices were issued claiming exemption from payment of service tax. Through debit and credit notes, the account adjustments were also made. As a result, no service tax was collected from the service recipient.
The appellant has also claimed exemption from service tax for an amount of Rs.43,26,000/-, in column B1.9 and Part-C, the appellant has claimed Rs.5,34,693/- to have been paid in advance under subrule (1A) of the said Rule 6.
A Coram comprising of Dr Suvendu Kumar Pati, Member (Judicial) and Mr Anil G Shakkarwar, Member (Technical) held that the said amount of Rs.5,34,693/- was paid as advance under sub-rule (1A) of Rule 6 of Service Tax Rules.
Further held that “since the amount sought for refund was advance paid as per the said subrule, the question of unjust enrichment does not arise. We, therefore, allow the appeal after setting aside the impugned order and direct the original authority to issue the refund cheque to the appellant within a period of four weeks from the date of service of a copy of this order on him.”
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