MADURA COATS PVT. LTD. Vs. UNION OF INDIA

JUDGEMENT

(1.) PETITIONER claims to have made use of the intellectual property, being the trade mark of M/s. J & P Coats Ltd., United Kingdom, subject to payment of royalty from March, 2001. During the period from 10 -9 -2004 to 31 -12 -2004, it is stated, there was no charging Section to tax receipts of service from outside India. With the insertion of Section 66A with effect from 18 -4 -2006, created a charge on receipt of service from outside India and made the service recipient liable to tax in terms of Rule 2(1)(d)(iv) of the Services Tax Rules, 2004 read with Sections 66A and 65(105)(zzr) of the Finance Act, 1994. Petitioner, states that though there was confusion in the matter of service tax administration during the aforesaid period, nevertheless, paid Service Tax together with education cess amounting to Rs. 15,16,992/ - on 25 -1 -2005 under two challans Annexure 'B' series. Petitioner on realizing that it was not liable to Service Tax since there was no charging Section under the Finance Act, 1994 claimed refund on 26 -9 -2005, resulting in a show cause notice dated 17 -11 -2005 to submit an explanation as to why the refund claim should not be rejected, to which petitioner submitted a reply. Respondent No. 3 rejected petitioner's refund claim by order No. 54/2006, dated 16 -3 -2006, against which, Appeal No. 81/2006, when filed was rejected by order dated 28 -9 -2006, where afterwards, the Customs, Excise and Service Tax Appellate Tribunal (for short, 'CESTAT') registered appeal No. ST/353/2007 and allowed the same by order dated 17 -6 -2009. This order, it is said, is final and binding.

(2.) PETITIONER , armed with the order of CESTAT made yet another representation for refund of Rs. 15,16,992/ -, whence the 3rd respondent by letter dated 27 -8 -2009, directed it to file a refund claim in Form R supported by documents. Petitioner, by letter dated 4 -9 -2009, once again requested for refund supported by documents. The second respondent, by order dated 15 -10 -2009, sanctioned the refund and credited it to the Consumer Welfare Fund on the premise of unjust enrichment, aggrieved by which, petitioner preferred an appeal to the Commissioner (Appeals), which was allowed by order dated 28 -12 -2011. Thereafter, several representations of the petitioner Annexure 'Q' series requesting refund, though not responded by the Revenue, nevertheless Revenue preferred an appeal before the CESTAT registered as ST/688/2012 together with a stay application. It is said that the stay application was dismissed by order dated 10 -9 -2012. Hence, this petition for a writ of mandamus directing the respondents to effect payment of refund.

(3.) THERE being no dispute that the stay application in the appeal filed by the Revenue before the CESTAT, is rejected, there is no reason for the respondent -Revenue not to effect refund. However, it is stated that there was unjust enrichment and therefore, refund amount was credited to the Consumer Welfare Fund. Therefore, the question as to whether the petitioner gained by unjust enrichment is required to be considered by the CESTAT in the appeal. Although learned counsel for petitioner submits that the said question does not arise for decision making, since CESTAT in its earlier order has opined that petitioner was the Consumer and the money had to be refunded to the petitioner, I am not impressed by that submission at this stage, since it may have to be advanced before the CESTAT in the appeal.