Karnataka State Agro Corn Products Ltd vs Commissioner Of Service Tax ...

[Arising out of Order-in-Appeal No. 118-2008 dated 17/03/2008 passed by CCE(Appeals-II), Bangalore]

For approval and signature:

HON'BLE SHRI B.S.V.MURTHY, TECHNICAL MEMBER

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3 Whether Their Lordships wish to see the fair copy of the Order?

4 Whether Order is to be circulated to the Departmental authorities?

KARNATAKA STATE AGRO CORN PRODUCTS LTD POST BOX NO.2479, BELLARY ROAD, HEBBAL, BANGALORE Appellant(s)

Versus

Commissioner of Service Tax BANGALORE-SERVICE TAX NULL 1ST TO 5TH FLOOR, TTMC BUILDING,above BMTC BUS STAND,DOMLUR BANGALORE, - 560071 KARNATAKA Respondent(s)

Appearance:

Shri N. Anand, Advocate K.S. RAVI SHANKAR # 152, RACE COURSE ROAD,BANGALORE BANGALORE - 560001 KARNATAKA For the Appellant

Shri R. Gurunathan, Addl. Commissioner(AR) For the Respondent

Date of Hearing: 19/03/2015

Date of Decision: 19/03/2015

CORAM:

HON'BLE SHRI B.S.V.MURTHY, TECHNICAL MEMBER

Final Order No. 20789 / 2015

Per : B.S.V. MURTHY

The appellant is a job worker registered under the category of business auxiliary service(BAS). They were doing job work for M/s. Karnataka Co-operative Milk Producers Federation and M/s. Saideep Feeds. The job work is manufacturing and supplying cattle feeds. Presuming that they were liable to pay service tax, the appellant paid the service tax during 2005-06 to 2006-07. Subsequently realizing that there were not liable to pay, the filed refund claim in February 2007 for the amounts paid by them during the whole of the earlier period upto June 2006. The total amount claimed as refund is Rs.10,25,118/-. A portion of the refund claim filed by the appellant amounting to Rs.7,10,060/- has been rejected on the ground that the refund claim was filed beyond the period of one year prescribed under Section 11B of Central Excise Act, 1944 made applicable to service tax matters by Section 83 of Finance Act, 1994. The balance amount of refund claim has been rejected in respect of 4 challans under which payment was made on the ground that appellant has not crossed the hurdle of unjust enrichment.

2. The learned counsel submits that there is no dispute about the taxability even though in the show-cause notice this ground was also taken by the Revenue that the service is taxable and tax has been paid correctly. The contention made by the appellant that they are not liable to pay tax at all has not been disputed and no findings has been recorded by both the lower authorities on this issue. Therefore he submits that it has to be understood that taxability is not an issue. I agree with this submission.

3. Coming to the limitation, the learned counsel even though placed reliance on the decision in the case of CCE(Appeals), Bangalore Vs. KVR Construction [2012(26) STR 195 (Kar.)], fairly agrees that in the case of MCI Leasing (P) Ltd. Vs. CCE, Mysore [2014(33) STR 497 (Kar.)], Honble High Court of Karnataka took a contrary decision and while doing so has considered the decision in the case of KVR Construction. That being the position, I do not think the question of limitation has to be addressed by me in detail. Therefore the rejection of a portion of the refund claim on the ground of limitation has to be upheld.

4. The third submission is with regard to unjust enrichment. Learned counsel submits that appellant had contended before the lower authorities that the invoices made by them did not show service tax liability separately and in respect of certain invoices even though service tax has been shown separately, the customers refused to pay the service tax liability. This submission has not been considered. Further he fairly agrees that appellant had not produced a Chartered Accountants certificate regarding non-passing of the liability to the customers. Both the lower authorities have taken the view that unjust enrichment is attracted because in some cases the service tax was not shown separately and the Chartered Accountant certificate was also not produced. He requests for an opportunity to produce necessary evidence to satisfy the lower authorities regarding unjust enrichment. I find this submission to be reasonable and to be accepted.

5. In view of the above discussion, the impugned order is set aside and the matter is remanded to the original adjudicating authority to consider the evidence that may be filed by the appellant to show that there was no unjust enrichment and they were eligible for the refund.

(Order pronounced dictated in open court)

B.S.V.MURTHY TECHNICAL MEMBER

Raja.

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