M/S. Sarnar Buildtech Pvt. Limited vs Commissioner Of Central Excise & S.T., ...

(Arising out of OIA-220/2013/STC/SKS/COMMR-A-/AHD dated 21.10.2013, Passed by Commissioner (Appeals) Central Excise, & S.T., Ahmedabad)

M/s. Sarnar Buildtech Pvt. Limited : Appellant (s)

VERSUS

Commissioner of Central Excise & S.T., Ahmedabad : Respondent (s)

Represented by :

For Appellant (s) : Shri Dhaval K. Shah, Advocate For Respondent (s) : Shri S.K. Shukla, Authorised Representative

For approval and signature :

Mr. H.K. Thakur, Honble Member (Technical)

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

No 2 Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

No 3 Whether their Lordships wish to see the fair copy of the Order?

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

Yes

CORAM :

Mr. H.K. Thakur, Honble Member (Technical)

Date of Hearing : 17.04.2015

Date of Decision : 01.05.2015

ORDER No. A/10459 / 2015 Dated 01.5.2015

Per : Mr. H.K. Thakur;

This appeal has been filed by the appellant with respect to OIA No. 220/2013 (STC)/ SKS/ Commr (A)/ Ahmedabad dated 18.10.2013/21.10.2013 passed by Commissioner (Appeals), Ahmedabad. The issue involved in the present proceedings is whether the doctrine of unjust-enrichment will be applicable to an amount which was paid by the appellant after the proceedings started but were not shown in the current Assets or Loans/ Advances or receivable in the balance sheets but were shown as expenditure in the books of account.

2. Sh. Dhaval Shah (Advocate) appearing on behalf of the appellant argued that the service tax paid by the appellant was not collected from the customers in the invoices and therefore, unjust-enrichment will not be applicable. Learned Advocate relied upon the following case laws 

(i) Ranade and Company vs. CST Ahemdabad - [2013 (32) STR 613 (Tri  Ahmd.)]

(ii) Sunbeam Auto Limited vs. CCE Delhi-III - [2005 (185) ELT 297 (Tri-Del)]

(iii) Plas Pack Industries vs. CC and CE, Ahemdabad - [2004 (167) CLT 422 (Tri- Ahmd.)]

(iv) CCE and Customs vs. J.M. Baxi & Co. - [2011 (271) ELT 19 (Guj.)]

3. Sh. S.K. Shukla (AR) appearing on behalf of the Revenue defended the order passed by the first appellate authority and relied upon the case Law of Keihin Fie Pvt Limited vs. CCE Pune-I, mentioned in Para -14 of the Order-in-Appeal passed by the first appellate authority.

4. Heard both sides and perused the case records. The issue involved in the present proceedings is whether refund of service tax paid by the appellant, after initiation of proceedings will attract under Section 11B of the Central Excise Act, 1944. It is the case of the Revenue that the amounts paid by the appellant are not shown as assets or amounts receivable in the balance sheet but have been shown as expenditure. On the other hand, appellant is of the view that service tax paid has not been recovered from the customers even if the amount so paid has not been kept receivables in the books of account. Both sides have relied upon case lows in their favour. It is observed from the case Law Keilin Fie Pvt Limited vs. CCE, Pune-I (supra) that the same was delivered with respect to services which were used in the manufactures of excisable goods and were debited in the Profit and Loss account. But in the present case, the issue is payment of service tax after initiation of proceedings against the appellant. Therefore, the case laws relied upon by the revenue is not applicable to the facts in hand.

4.1. It is also observed from the case law of Ranade and Co vs. Commissioner of Service Tax, Ahmedabad (supra), that the facts of this case and the opinion given by this bench are as follows:-

1. Appellant is a firm of chartered accountants and are providing services under the category of practising Chartered Accountant. The appellant filed a refund claim of Service Tax paid for Rs. 21,102/-. The refund claim was filed consequent to dropping of show cause notice raising a demand against the appellant taking a view that Service Tax is liable to be paid on auditing services rendered by the firm. The refund claim has been rejected on the ground of unjust enrichment.

2.? Heard both the sides. Even though several decisions were cited by both the sides relating to admissibility or otherwise of the refund claim on grounds such as the amount is not a duty but only a deposit; the amount was shown as expenditure in the balance sheet and whether such showing would amount to collection of the same from the customers or not and whether Service Tax was to be shown in the invoice or not etc. I feel that it is not necessary to consider all these decisions to come to a conclusion since in my opinion the facts in this case are clear enough to show that there was no unjust enrichment and refund claim is admissible. Firstly, I am in total agreement with the submission made by the ld. consultant that the appellant was rendering different types of services during the relevant period and wherever the service rendered was a taxable service, the invoice was showing the Service Tax separately and paying the same to the department. Where the appellant felt that the service was not liable to Service Tax, no Service Tax was collected. This itself in my opinion would be sufficient to show that the appellant had not collected the amount from the customers.

Original adjudicating authority took the view that Service Tax should have been shown as nil which in my opinion was not required. Coming to the fact that the amount was shown as expenditure in the balance sheet after paying the amount to the department, obviously this has to be shown as an expenditure since the amount was not collected from the customers. The only omission that can be used for rejecting the refund claim is the fact that appellants have not shown it as a receivable amount. However, the appellant relied upon the decision of the Tribunal in the case of Sunbeam Auto Ltd. - 2005 (185) E.L.T. 297 (Tri.-Del.). In Para 5 of this decision, it was observed Further the appellant is keeping this amount in their account as sales expenses and some were deducted out of their profit, therefore, the refund claim cannot be denied on this ground also. Having regard to the facts and circumstances and also the amount involved, I find that appellant is eligible for the refund claimed by them and allow the appeal with consequential relief to the appellant. 4.2. In the present case also, there is no evidence brought on record that the service tax paid has been shown on the invoices as collected from the service recipients.

In view of the settled preposition of law, appeal filed by the appellant is required to be allowed.

5. Appeal filed by the appellant is allowed with consequential relief.

(Order pronounced in the Court on 01.05.2015)

(H.K. Thakur) Member (Technical) .KL

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