The Chennai Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the final buyer of goods/recipient of service is entitled for refund of tax, if any that is due.
The bench of M. Ajit Kumar (Technical Member) has observed that it is the appellant/final buyer who has borne the ultimate incidence of the tax, and not the Trust, who is the eligible claimant of the refund and is not barred from claiming the same. The question of unjust enrichment also does not arise as the amount has been paid from the appellants own resources and has not been shown to have been passed on.
The appellant/assessee had paid service tax towards ‘senior living fee’ to M/s. Vedanta Brindhavan Senior Citizens Welfare and Service Trust, Coimbatore which had paid service tax to the Government account on 4.11.2016.
The appellant claimed that as he had not received any set off nor rendered any service to the Trust and that the payment of the amount is a mistake of law, he is hence eligible for a refund claim filed by him. The Original Authority rejected the refund claim on the ground of limitation and unjust enrichment.
The appellant preferred an appeal before Commissioner (Appeals) who rejected the appeal filed by the appellant.
The tribunal held that a refund of money mistakenly paid as Service Tax can be made in accordance with the provisions of Section 11B of CEA 1944, as made applicable to Service Tax by virtue of Section 83 of the FA 1994.
The issue raised was whether only the Trust was eligible to claim the refund and not an individual who has ultimately paid the tax?
The tribunal while answering the issue held that inclusion of the ‘presumption’ by way of section 12B was to ensure that the person who finally pays the tax from his own resources is the only one who is reimbursed by the refund otherwise the amount is to be deposited in the Consumer Welfare Fund. In the impugned case the appellant states that the tax, though illegal, has finally come to be collected from him and the incidence of the tax has come to finally rest with him as being the final consumer. Hence he is eligible for the refund and there is no unjust enrichment involved.
Case Details
Case Title: K. Ramani Versus Commissioner of GST & Central Excise
Case No.: Service Tax Appeal No.40620 of 2023
Date: 03.12.2024
Counsel For Appellant: K. Ramani
Counsel For Respondent: Sanjay Kakkar
