Case Law Details
1. This is an appeal under Section 35G of the Central Excise Act, 1944 (‘CE Act’) read with Section 83 of the Finance Act, 1994 (‘FA’) against the final order dated 20th September, 2016 passed by the Customs, Excise and Service Tax Appellate Tribunal, Delhi (‘CESTAT’) dismissing appeal No. ST/A/53726/2016-CU(DB).
2. The facts in brief are that the Appellant/Assessee is inter alia engaged in the manufacture of clinker and cement falling under Chapter heading 25 of the CE Tariff Act, 1985. Between 16th July, 1997 and 30th September, 1999, the Appellant received ‘Clearing and Forwarding Agent Service’ from various services providers. In terms of the provisions that existed during the relevant period, the Appellant paid service tax of Rs.35,42,021 for the period 16th July, 1997 to 30th September, 1999 under the category of „Clearing and Forwarding Agent Service‟ on the services so received.
3. In its decision in Laghu Udyog Bharti Vs. Union of India 1999 (112) ELT 365 (SC), the Supreme Court by its judgement dated 27th July, 1999 held that the person who is receiving services cannot be made responsible for filing returns and paying tax. To overcome the said judgement, on 23rd August, 1999 Notification No. 7/1999-ST was issued with effect from 1st September, 1999 whereby sub-clause (iii) in Rule 2(1)(d) of the Service Tax Rules, 1994 was omitted. Meanwhile on 18th November, 1999, following the judgement of the Supreme Court in Laghu Udyog Bharti (supra), the Appellant filed refund claim of Rs.35,42,021 being the service tax paid during the period 16th July, 1997 to 30th September, 1999.
4. However, by the order dated 24th January, 2000, the Assistant Commissioner rejected the refund claim on account of unjust enrichment. The amount was asked to be transferred to the Government welfare fund.
5. While the Appellant‟s appeal was pending before the Commissioner (Appeals), by the Finance Act with effect from 13th May, 2000 a retrospective amendment was made to the FA, 1994 to overcome the effect of the decision of the Supreme Court in Laghu Udyog Bharti (supra).
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