Consult Us For Construction
Service Tax Case Law - Refund on erroneous payment of service tax under RCM.
M/s GODREJ & BOYCE MFG. CO. LTD Vs COMMISSIONER OF CGST, NAVI MUMBAI
Service Tax – erroneous payment of service tax under Reverse Charge Mechanism - Rejection of refund claim made by the appellant on the ground that it failed to qualify the test of unjust enrichment - jurisdiction of the Tribunal to entertain the appeal.
HELD - rejection of refund is solely confined to the dispute concerning applicability of doctrine of unjust enrichment to the appellant since the claim of refund was allowed in the first round of litigation and the same attained finality being unchallenged by the department. Therefore, the determination of such an issue is well within the jurisdiction of this Tribunal
The appellant’s claim that it had paid the Service Tax under the erroneous belief that as per RCM, it is liable to pay the same but subsequently Board Circular had clarified the same to be non-taxable. Therefore, the service tax is supposed to be treated as a deposit as there is no sanctioned behind it by the legislature in conformity to Section 265 of the constitution of India - Commissioner (Appeals) had drawn a presumption that incidence of duty had passed on knowing, fully well that presumption.
However strong, cannot take the place of proof - Adjudicating Authority and Appellate Authority had drawn adverse inference to the bonafideness of the appellant who consider it their burdened duty to pay Service Tax under Reverse Charge Mechanism which was infect not payable as per clarifictory circular issue by the Board. Therefore, the appellant has passed the test of unjust enrichment and it is entitled to the refund claimed by it for non-leviable Service Tax
The appellant is entitled to refund claim with applicable interest - The appeal is allowed.