Relief to BSNL: CESTAT Allows Refund Claim of Approx. Rs 2 Crores of Deposited Service Tax on Telecom Services on ground of Absence of Principle of Unjust Enrichment [Read Order]

The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) allowed a refund claim of approximately Rs 2 crores of deposited service tax by Bharat Sanchar Nigam Ltd (BSNL) on telecom services on the ground of the absence of the principle of unjust enrichment. 

Bharat Sanchar Nigam Ltd (BSNL), the respondent assessee was engaged in providing taxable services under the category of telephone services and holding a valid service tax registration with the department and filed a refund claim of Rs 2,37,13,418 of the amount of service tax deposited by them. 

The revenue appealed against the order passed by the Assistant Commissioner of Service Tax for sanctioning the refund claim of the amount deposited by the assessee. 

Ghanasyam Soni, the counsel for the department contended that since the rate of the BSNL for telephone/mobile phone are pre-determined and therefore the expenditure incurred later on by the respondent assessee cannot be directly passed on to the customers by any chance. 

Further submitted that the refund claim of the assessee was not as per the law and the sanctioning of the refund claim was not liable to be sustained. 

Nitesh Parmar, the counsel for the assessee contended that the element of unjust enrichment in this particular case is not present and the respondent-assessee was entitled to a refund of the deposit which was made to them during the inquiry and which was legally considered as pre-deposit by the assessee. 

The Bench observed that the deposit is taken during an investigation or as a pre-deposit at the time of the admission of the appeal will not be hit by the provision of Section 11 B of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994. 

The two-member bench comprising Ramesh Nair (Judicial) and C.L Mahar (Technical) upheld the sanctioning of the refund claim while dismissing the appeal filed by the department. 

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates