The Central Excise, Customs and Service Tax Appellate Tribunal (CESTAT), Delhi bench has held that the amount of service tax paid by mistake shall be treated as deposit and shall be refunded to the taxpayer within the provisions of the Finance Act, 1994.
The appellant is registered with the Service Tax Department. The appellant filed refund claim for Rs. 31,50,587/- on 25.05.2011 by stating that the amount was paid by mistake without knowing the fact that the services provided, i.e., the work undertaken by them for Electricity Board/Nigam, were not liable to service tax. They further submitted that limitation u/s 11B is not applicable in this case, as the amount was paid mistakenly which was not payable.
Allowing the contentions of the appellants, the Tribunal bench comprising Judicial Member Mr. Anil Joudhary held that “service tax was not leviable on the services provided by the appellants, which was paid by mistake by the appellants, thus, it will be treated as deposit, ipso facto, and are entitled for refund.”
“This fact is more evident as the services provided by the appellants are – route survey, design, supply of material for construction, erection and commissioning of 33KV D/C Line on Panther Conductor for 2.5 km from 132 KV GSS, Equipment for the work of urban focus programme, equipment for providing HVD/LVD system, etc,” the Tribunal said.
With regard to the applicability of unjust enrichment, the Tribunal added that “as per contract it is clear that the prices are Firm in all respect and Independent of any variation. It is also not in dispute that the appellants have not charged any service tax in their invoices. I am of the view that unjust enrichment is also not applicable.”
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