PRACHAR COMMUNICATIONS LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE dispute in the present appeal relates to the refund of excess service tax paid by the appellant, which was originally sanctioned by the appropriate authority. Thereafter proceedings by way of issuance of show cause notice dt. 9.6.2002 were initiated on the ground that such refund was erroneous and as such proposing recovery of the same.

(2.) AS per facts on record appellant claimed refund of service tax paid on gross amount of bills before discount raised against M/s. Emami Ltd. on the ground that service tax was payable on the gross amount actually charged i.e. after discount. The said refund was sanctioned by the Deputy Commissioner vide his order dt. 9.10.01 and 29.11.01 and was actually paid to the appellant on 13.12.2001. The Commissioner vide his impugned order has held such refunds to be erroneous on the ground that the same were recovered by the appellant from their customers and the subsequent adjustment by way of credit notes cannot be considered to conclude that the burden of duty has not been passed on to the buyers or the ultimate consumer. As such he has held that grant of refund resulted in unjust enrichment to the appellant and accordingly ordered for recovery of the same under Section 73 of the Finance Act, 1994.

(3.) THE above contention of the appellant's have not been accepted by the Commissioner on the ground that the provisions of section 11B are applicable to Service Tax Rules so far as refund of service tax paid in excess or otherwise is concerned. In the present case appellant had reimbursed the excess service tax paid by them by way of credit notes to their clients. By relying upon the Tribunal's decision, he has held that once the burden of duty has been passed on to the buyer or the ultimate consumer, subsequent reimbursement of the same by way of credit notes will not be of any advantage to the assessee.