M/s Godrej & Boyce Mfg. Co. Ltd. Versus Commissioner of CGST, Navi Mumbai
Service Tax
2019 (2) TMI 1424 – CESTAT MUMBAI – 2019 (24) G. S. T. L. 362 (Tri. – Mumbai)
CESTAT MUMBAI – AT
Dated:- 22-2-2019
APPEAL NO. ST/86812/2018 – A/85361/2019
Service Tax
DR. SUVENDU KUMAR PATI, MEMBER (JUDICIAL)
Shri K.A. Photographer, Associate Vice President for Appellant
Shri Dilip Shinde, Assistant Commissioner (AR) for Respondent
ORDER
Rejection of refund claim made by the appellant on the ground that it failed to qualify the test of unjust enrichment is the subject matter of this appeal in this second round of litigation.
2. Factual backdrop of the case is that appellant M/s Godrej & Boyce Manufacturing Co. Ltd. claimed refund recalculated as Rs. 19,66,794/- for the period from April 2008 to September 2008 on commission received for export of services from a Singapore based company M/s Komatsu Asia Pvt. Ltd. against sale and services of its trucks in India. Appellant's
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rders. At the same time, the procedural aspect of filling the declaration and granting the refund to the appellant needs to be done. Accordingly I direct the appellant to file the declaration as required under Notification No. 12/2005 read with Export of Services Rules, 2005 before the Adjudicating Authority and the Adjudicating Authority on receipt of such declaration, will process refund claims.”
20. In view of the foregoing discussions, I set aside the impugned order on merit with the direction to the refund sanctioning authority to sanction the refund/rebate subject to observance of the procedure and the applicability of the doctrine of unjust enrichment. The appeal of the appellant is allowed in above terms with consequential relief, if any.”
3. Appellant complied with the orders, appeared before the Assistant Commissioner of Service Tax, Division-I, Mumbai-VII and participated in the personal hearing, who vide his order dated 28.10.2016, made some adverse observation on the m
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through CENVAT credit except for the month of June, 2008. The payment under reverse charge was always required to be made through CASH only. Therefore the claim of the claimant that they made the Service Tax under reverse charge does not hold ground.
(iii) xxxxxxx
(iv) From the above bills, it can be seen that the claimant has received Rs. 9,37,714/- (inclusive of Service Tax) by way of foreign exchange remittance equivalent to USD 22,186/- from the foreign client and it was credited to their account. This is evident form FIRC no. 3129007336 for an amount of USD 22,176/-. It is therefore conclusively proved that the claimant has received the payment inclusive of Service Tax from the foreign customer. The claimant claims that they merely worked back from the said commission amount of Service Tax liability to be discharged by them under reverse charge and paid the said Service Tax amount from the actual service commission received by them. I find that once the invoice or bill has bee
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ice Tax and doctrine of unjust enrichment is applicable in this case.
(9) xxxxxxxxxx
10. The claimant has submitted the certificate of Chartered Accountant and foreign customer to prove that they have not recovered any amount of Service Tax from their customer. It is already proved that the amount received by the claimant from their foreign customer is inclusive of Service Tax, therefore the Certificate issued by C.A. has no relevance. The CA certificate is neither corroborative by any documentary evidence nor does it explain the method adopted for arriving at the conclusion that the Service Tax has not been recovered from the clients which puts the said certificate on a weak footing in view of the facts and documents discussed in the foregoing paras. Further the CA certificate alone cannot prove that the incidence of duty/tax has not been passed to the customers. For this proposition, I rely on the decision of Hon'ble Tribunal in case of CCE, Chennai-II Vs. M/s Caterpillar India P
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have already held in para 8 (iv) (ii) above that the payment made by the claimant is not under reverse charge and the same was made by them as a service provider and the amount has been collected from the client and paid to the government treasury, therefore the case law cited by them is not relevant in the instant refund claim.
12. To sum up, I hold that the “Business Auxiliary Services” provided by the claimant qualify as export of service. They have fulfilled the procedural aspect for claiming the rebate under Notification No. 11/2005-ST dated 19.04.2005. However, the claimant has failed the test of doctrine of unjust enrichment in the instant refund claim, as the incidence of duty has already been passed to the clients/third party.”
4. Being aggrieved by the above rejection order, appellant preferred on appeal before the Commissioner (Appeals) and as the same yielded no fruitful result, it has approach this Tribunal seeking relief in this second round of litigation.
5. In the
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g of the Adjudicating Authority that appellant had failed in the test of unjust enrichment, despite the fact that judicial decision regarding acceptance of Chartered Accountant certificate by the Hon'ble High Court of Gujarat in the case of Joshi Technologies International Vs. Union of India – [2016 (339) ELT 21 (GUJ)] and Tribunal decisions reported in [2014 (34) STR 890 (Tri.-Mumbai)] in the case of Vodafone Cellular Ltd. Vs. Commissioner of Central Excise, Pune-III, [2018 (12) GSTL 316 (Tri.-Del.)] in the case of Western Union Financial Services Inc. Vs. Commissioner of Service Tax, Delhi and [2015 (40) STR 699 (Tri.-Mumbai)] in the case of Commissioner of Service Tax, Mumbai-I Vs. Vodafone (India) Ltd. were all in favour of appellant, for which he prayed to set aside the order of the Commissioner (Appeals).
6. In response to such submissions, Shri Dilip Shinde, learned Assistant Commissioner (AR) for the respondent-department has supported the reasoning and rationality of the
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appellant had submitted declaration in compliance to Notification No. 11/2005 read with Export of Service Rules, 2005 to the Adjudicating Authority and also made an alternative prayer in the grounds of appeal. In the first round of litigation, which was not made before the Commissioner (Appeals) at the first instance who passed order in favour of the appellant, the test of unjust enrichment was asked to be decided by the Refund Sanctioning Authority. This being so, rejection of refund is solely confined to the dispute concerning applicability of doctrine of unjust enrichment to the appellant, since claim of refund was allowed to it and the same attained finality being unchallenged by the respondent department. Therefore, determination of such an issue is well within the jurisdiction of this Tribunal for which hearing had been rightly preceded.
8. The test of unjust enrichment, in its limited applicability, is confined to the consideration as to who had borne the incidence of tax? If
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tution of India. It is not understood as to why the Adjudicating Authority and Appellate Authority have ignored this documentary evidence and only placed their reliance on bifurcation of tax component in the invoice raised by the appellant, which appellant claims to have been prepared for the purpose of calculation of Service Tax liability only and on the basis of foreign exchange remittance as well as invoice copies, Commissioner (Appeals) had drawn a presumption that incidence of duty had passed on knowing, fully well that presumption/suspicion, however strong, cannot take the place of proof. Despite the fact that Adjudicating Authority vide his order dated 28.10.2016 (page no. 12 of the appeal memo) under para 8 (iii) had given his observation that it was for the appellant to change/amend their CIF system to make it complacent as per their requirement and they have not done so. Further, when the service receiver denied to have born the incidence of tax, it is not understood as to wh
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