CA Certificate Insufficient to Conclude that the Incidence of Tax has been Passed on to the Customer: CESTAT Remands Matter to RSA [Read Order]

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Hyderabad, held that a Chartered Accountant (CA) Certificate is insufficient to conclude that the incidence of tax has not been passed on to the customer. In a matter related to this, CESTAT remanded the case to theRefund Sanctioning Authority (RSA).

The appellants provide Business AuxiliaryService (BAS) to M/s Ushoyada Enterprises Ltd. The appellant, M/s Margadarsi Marketing Private Limited filed a refund claim on 22.03.2006 for ‘space selling services’, this refund was rejected and the matter reached the CESTAT. It was held that they were not able to establish that incidence of service tax has not been passed on.

The counsel for the appellant submitted a CACertificate and letter from Ushodaya that they have not availed any Cenvat credit. On the other hand, opposing counsel argued that a CA certificate cannot be a substitute for statutory documents including documents specified under Section 12A of the Central Excise Act like ST3 returns, sales invoices, etc. Both sides relied heavily on past judgments.

The tribunal observed that mere CA Certificate without supporting documents and evidence may not be acceptable as a conclusive evidence of having not passed on the incidence of tax to the ultimate consumer.

The bench of A.K. Jyotishi (Technical Member) and Angad Prasad (Judicial Member) remanded the matter back to the RSA for re-computing the amount of consequential refund admissible on merit and re-assess if the appellant had crossed the bar of unjust enrichment.

Accordingly, the appeals were allowed.

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