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CESTAT : Interprets contract clauses, sanctions refund of service-tax erroneously paid under reverse charge

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  • CESTAT upholds refund of service tax mistakenly discharged on reverse charge basis in respect of leasing of tunnel boring machines for execution of contract entered with DMRC, under category of “supply of tangible goods for use” (STGU);
  • Notes that on merits, issue is settled in assessees' favour since STGU service came into effect from May 16, 2008 much after contract with DMRC was executed, hence there was no occasion for factoring service tax component in the contract price; Holds, Revenue's findings that refund claim was hit by doctrine of unjust enrichment u/s11B of Central Excise Act is contrary to factual observation that assessee has not transferred burden of service tax to any person, hence is simply absurd;
  • States, CA certificate stating that assessee did not receive service tax amount from lessor or DMRC or any other person should be considered as a corroborative evidence, moreover, observes that, DMRC rejected assessees’ claim for price variation for inclusion of disputed service tax amount and said amount was shown as ‘receivable’ in assessee’s balance sheet; States further that, Revenue’s findings that phrase “inclusive of tax” imply that assessee collected service tax is legally unsustainable, consequently allows assessee’s appeal : Delhi CESTAT
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Guest Tuesday, 25 September 2018

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