Burden of proving unjust enrichment is on Revenue

CA Urvashi Porwal

 Brief of the Case

In the case of Balaji Pressure Vessels Ltd. VS. Commissioner of Central Excise, it was held that when the assessee has provided the required documents for justifying that the incidence of tax has not been passed on, it is for the department to show by adducing some material that the incidence of tax has been passed on. Merely because the amount was shown as expenditure it cannot be concluded that the burden of tax has been passed on to other indirectly.

Facts of the Case

The appellant is aggrieved by the Order passed by Commissioner (Appeals) by which the sanctioned refund was ordered to be credited to the Consumer Welfare Fund, on the ground of being hit by unjust enrichment. The appellants are registered with the service tax department under the category of “Maintenance and Repair service” and other services. A show cause notice was served alleging non-payment of service tax for the period 01-07-2003 to 31-03-2005 for an amount of Rs. 4,44,189/- The appellants paid an amount of Rs.89,150/- prior to issuance of Show cause notice. After due process of law, the original authority passed order confirming the demand interest and penalty. The appellants filed appeal before the Commissioner (Appeals) and vide Order dated 25-09-2008, the entire demand was set aside allowing the appeal with consequential reliefs, if any. The appellants then filed an application for refund of the amount of Rs. 89,150/- paid by them initially and also furnished a Chartered Accountant Certificate. A show cause notice was issued proposing to reject the claim on the ground of being time barred as per Section 11B of the Central Excise Act, 1944. After adjudication, the Original authority vide Order dated 30-12-2011 held that the refund claim is filed within the specified time limit of one year from the relevant date. However, the refund claim was rejected observing that appellants have not proved that the burden of duty has not been passed on to other person. The appellants carried the issue before the Commissioner (Appeals) who vide the Order impugned herein, sanctioned the refund, but ordered the amount to be credited to be Consumer Welfare fund. Being aggrieved the appellants have preferred the present appeal.

Please become a Premium member. If you are already a Premium member, login here to access the full content.