Case Law Details
Pecon Computech Pvt Ltd Vs Commissioner of CGST & Excise (CESTAT Kolkata)
Introduction: The case of Pecon Computech Pvt Ltd Vs Commissioner of CGST & Excise brings forward a crucial understanding of Service Tax refund in the realm of Indian taxation. The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Kolkata, ruled that the doctrine of unjust enrichment does not apply when the appellant made the payment under dispute.
Analysis: Pecon Computech Pvt Ltd was embroiled in a Service Tax dispute amounting to Rs.1,53,031/-. After various proceedings and appeals, the revenue department withdrew its appeal against Pecon Computech under the National Litigation Policy, leading to the company’s payment of the disputed tax amount and subsequent refund claim. The company’s refund claim was initially rejected due to the perceived delay and the barrier of unjust enrichment. However, CESTAT Kolkata ruled that the limitations and the principle of unjust enrichment do not apply in this case.
The Tribunal acknowledged that Pecon Computech had made the payment during the pendency of the appeal, and no demand was sustainable against the appellant once the revenue department withdrew its appeal. Thus, the payment was merely a deposit and not subject to any time limitation or unjust enrichment barrier.
Conclusion: The case of Pecon Computech Pvt Ltd Vs Commissioner of CGST & Excise highlighted the nuances of service tax refund claims. CESTAT Kolkata’s verdict underlined the non-applicability of unjust enrichment and the time limit in this specific context, granting the appellant the right to a refund claim. This case serves as a valuable reference for understanding the tax refund mechanism within the realm of Indian service tax law.
FULL TEXT OF THE CESTAT KOLKATA ORDER
The appellant is in appeal against the impugned order where the ld. Adjudicating Authority has rejected their refund claim.
2. The facts of the case are that the show-cause notice dated 05.09.2008 was issued to the appellant to demand Service Tax amounting to Rs.1,53,031/-. The adjudication took place and the demand of service tax was confirmed by the order dated 15.01.2009. the said order was challenged before the ld. Commissioner (Appeals) and the ld. Commissioner (Appeals) vide its order dated 29.01.2010 dropped the proceedings against the appellant. The said order was challenged before this Tribunal by the Revenue, but the said appeal was withdrawn on 27.02.2016 under National Litigation Policy. As during the pendency of the appeal before this Tribunal, the appellant paid the disputed amount of service tax. Thereafter, the appellant filed refund claim on 28.02.2016 as there was no demand sustainable against the appellant. Thereafter, a show-cause notice was issued to the appellant for rejection of their refund claim dated 26.12.2016 as the refund claim is filed beyond the period of limitation and fails to pass the bar of unjust enrichment. Thereafter, the refund claim was rejected and on appeal, the adjudication order was confirmed and the refund claim was rejected. Against the said order, the appellant is before me.
3. The ld.Counsel for the appellant, submits that they have made the said payment for which they have sought refund on 20.06.2011 when the appeal filed by the Revenue was pending before this Tribunal. Later on, when this Tribunal decided the appeal under National Litigation Policy in their favour, they have claimed refund claim. Therefore, the question of time of refund does not arise. Moreover, they have made payment for the period from 10.09.2004 to 15.06.2005 on 26.02.2011 at the time when the appeal was pending before this Tribunal. In that circumstances, the bar of unjust enrichment does not arise.
4. On the other hand, the Ld. A.R. for the Revenue, opposes the above contentions made by the ld.Counsel for the appellant and submits that the appellant has paid amount for which they sought refund without protest after decision on merit by the Hon’ble Apex Court against the appellant and the appeal was pending before the Tribunal filed by the Revenue. Therefore, they are not entitled to claim the refund as the demand of service tax is legally sustainable against the appellant.
5. Heard the parties and considered the submissions.
6. At the time when the ld. Commissioner (Appeals) passed the order for dropping the proceedings against the appellant, the decision of the Hon’ble Apex Court was not available. Therefore, the appellant was not liable to pay any service tax for the impugned period. Moreover, the appeal filed by the Revenue against the order of the ld. Commissioner (Appeals) has already been withdrawn under National Litigation Policy on 27.02.2016, thereafter, no demand is sustainable against the appellant and the amount paid by the appellant on 26.02.2011 is only a deposit. In view of this, no limitation is applicable. Further, no bar of unjust enrichment is applicable in the facts and circumstances of this case, as the appellant has also made the payment for the period from 10.09.2004 to 15.06.2005 on 26.02.2011.
7. In that circumstances, I hold that the appellant is entitled for refund claim and the decision in the case of Tiger Logistics (India) Ltd. : 2022 (63) GSTL 337 (Tri.-Del.) is not applicable to the facts and circumstances of the present case.
8. Accordingly, I do not find any merit in the impugned order and the same is set aside.
9. In the result, the appeal is allowed with consequential relief, if any. Cross objection also gets disposed off.
(Dictated and pronounced in the open court)
