w w w . L a w y e r S e r v i c e s . i n



M/s. Dewsoft Overseas Pvt. Ltd. v/s Commissioner of Service Tax, Delhi


Company & Directors' Information:- R P G OVERSEAS PRIVATE LIMITED [Active] CIN = U74899DL1989PTC035238

Company & Directors' Information:- M K OVERSEAS PRIVATE LIMITED [Active] CIN = U25209DL1987PTC029976

Company & Directors' Information:- P K OVERSEAS PRIVATE LIMITED [Active] CIN = U74899DL1994PTC059051

Company & Directors' Information:- U & M OVERSEAS PRIVATE LIMITED [Active] CIN = U25200DL2007PTC165258

Company & Directors' Information:- B R K OVERSEAS PRIVATE LIMITED [Active] CIN = U51311DL2002PTC117390

Company & Directors' Information:- A V I OVERSEAS PRIVATE LIMITED [Active] CIN = U74899DL1994PTC059014

Company & Directors' Information:- J C OVERSEAS LIMITED [Active] CIN = U65993WB1999PLC090116

Company & Directors' Information:- J S OVERSEAS PVT LTD [Active] CIN = U74899DL1994PTC058039

Company & Directors' Information:- H A OVERSEAS PRIVATE LIMITED [Active] CIN = U55101CH1999PTC032886

Company & Directors' Information:- B. R. OVERSEAS LIMITED [Active] CIN = U24111MP1973PLC001244

Company & Directors' Information:- A T OVERSEAS LTD [Active] CIN = U17115PB1995PLC015815

Company & Directors' Information:- A L OVERSEAS PRIVATE LIMITED [Active] CIN = U15300DL2013PTC250975

Company & Directors' Information:- D R OVERSEAS PRIVATE LIMITED [Active] CIN = U15122DL2013PTC253214

Company & Directors' Information:- M R OVERSEAS PRIVATE LIMITED [Active] CIN = U01111DL1998PTC092787

Company & Directors' Information:- B C C OVERSEAS PRIVATE LIMITED [Active] CIN = U74899DL1994PTC058775

Company & Directors' Information:- R B OVERSEAS PVT LTD [Active] CIN = U24200MH1982PTC028320

Company & Directors' Information:- S L OVERSEAS PRIVATE LIMITED [Active] CIN = U74899DL1999PTC099800

Company & Directors' Information:- B L OVERSEAS PRIVATE LIMITED [Active] CIN = U51109DL2008PTC177039

Company & Directors' Information:- G D R OVERSEAS LIMITED [Strike Off] CIN = U51909TN1994PLC028831

Company & Directors' Information:- S. B. OVERSEAS PVT LTD [Active] CIN = U27101WB1994PTC065565

Company & Directors' Information:- G B OVERSEAS PRIVATE LIMITED [Active] CIN = U51109WB2007PTC116567

Company & Directors' Information:- G B OVERSEAS PRIVATE LIMITED [Active] CIN = U74110DL2007PTC317094

Company & Directors' Information:- AT OVERSEAS INDIA PRIVATE LIMITED [Active] CIN = U74900DL2015PTC276303

Company & Directors' Information:- M D OVERSEAS LIMITED [Active] CIN = U52110DL1980PLC011099

Company & Directors' Information:- R C OVERSEAS PRIVATE LIMITED [Active] CIN = U74899DL1991PTC045610

Company & Directors' Information:- S. R. O. OVERSEAS PRIVATE LIMITED [Active] CIN = U51101DL2014PTC268846

Company & Directors' Information:- K P OVERSEAS LIMITED [Active] CIN = U51311DL2004PLC125574

Company & Directors' Information:- M I OVERSEAS PRIVATE LIMITED [Strike Off] CIN = U74899DL1987PTC026966

Company & Directors' Information:- R F OVERSEAS PRIVATE LIMITED [Active] CIN = U51909PB1997PTC019643

Company & Directors' Information:- M R K OVERSEAS PRIVATE LIMITED [Active] CIN = U74899DL1984PTC018631

Company & Directors' Information:- L & W OVERSEAS PRIVATE LIMITED [Active] CIN = U17221PB2013PTC037343

Company & Directors' Information:- C D OVERSEAS PRIVATE LIMITED [Strike Off] CIN = U51909DL1997PTC085553

Company & Directors' Information:- J D OVERSEAS PRIVATE LIMITED [Active] CIN = U74899DL1990PTC038866

Company & Directors' Information:- A A P OVERSEAS PRIVATE LIMITED [Strike Off] CIN = U51909KA2007PTC042105

Company & Directors' Information:- K G OVERSEAS PRIVATE LIMITED [Strike Off] CIN = U74899DL1993PTC054832

Company & Directors' Information:- OVERSEAS CORPN. PVT LTD [Active] CIN = U67120WB1947PTC014910

Company & Directors' Information:- G R OVERSEAS PRIVATE LIMITED [Strike Off] CIN = U74899DL1992PTC050950

Company & Directors' Information:- A M D OVERSEAS PRIVATE LIMITED. [Active] CIN = U52110DL1980PTC010622

Company & Directors' Information:- M S D OVERSEAS PRIVATE LIMITED [Strike Off] CIN = U74899DL1995PTC069001

Company & Directors' Information:- R K G OVERSEAS PRIVATE LIMITED [Active] CIN = U51229DL1997PTC086734

Company & Directors' Information:- DEWSOFT OVERSEAS PRIVATE LIMITED [Active] CIN = U72900DL2000PTC108691

Company & Directors' Information:- N D OVERSEAS PRIVATE LTD [Converted to LLP] CIN = U51900MH1994PTC076787

Company & Directors' Information:- N W OVERSEAS PRIVATE LIMITED [Active] CIN = U51507HR1999PTC034265

Company & Directors' Information:- R. G. OVERSEAS LIMITED [Strike Off] CIN = U27104TN1981PLC008963

Company & Directors' Information:- P M OVERSEAS PRIVATE LIMITED [Active] CIN = U51909DL1991PTC045126

Company & Directors' Information:- J M B OVERSEAS PRIVATE LIMITED [Active] CIN = U51909WB1997PTC085224

Company & Directors' Information:- S C J OVERSEAS PRIVATE LIMITED [Active] CIN = U74899DL1993PTC052913

Company & Directors' Information:- M C S OVERSEAS PVT LTD. [Strike Off] CIN = U51909WB1994PTC063666

Company & Directors' Information:- B. J. OVERSEAS PVT. LTD. [Strike Off] CIN = U24134WB1994PTC063846

Company & Directors' Information:- A H OVERSEAS PRIVATE LIMITED [Strike Off] CIN = U51109UP1977PTC004421

Company & Directors' Information:- R M OVERSEAS LTD [Active] CIN = U51909PB1992PLC011971

Company & Directors' Information:- L O P OVERSEAS PRIVATE LIMITED [Active] CIN = U51109UP2001PTC026011

Company & Directors' Information:- R R OVERSEAS LTD [Active] CIN = U51909DL1993PLC054909

Company & Directors' Information:- U D OVERSEAS PRIVATE LIMITED. [Strike Off] CIN = U74999DL2000PTC105257

Company & Directors' Information:- S A OVERSEAS PRIVATE LIMITED [Active] CIN = U51909DL2001PTC112769

Company & Directors' Information:- A H R OVERSEAS PRIVATE LIMITED [Active] CIN = U51909DL2000PTC103069

Company & Directors' Information:- H S OVERSEAS PRIVATE LIMITED [Active] CIN = U51909DL2008PTC182147

Company & Directors' Information:- S G OVERSEAS PRIVATE LIMITED [Active] CIN = U18101DL2000PTC105649

Company & Directors' Information:- R AND R OVERSEAS PRIVATE LIMITED [Strike Off] CIN = U18101DL1987PTC030154

Company & Directors' Information:- D & D OVERSEAS PRIVATE LIMITED [Strike Off] CIN = U51420OR2009PTC010779

Company & Directors' Information:- A TO Z OVERSEAS PRIVATE LIMITED [Active] CIN = U51909PB2007PTC031342

Company & Directors' Information:- J P OVERSEAS PRIVATE LIMITED [Active] CIN = U74899DL1994PTC059744

Company & Directors' Information:- R Q OVERSEAS PRIVATE LIMITED [Strike Off] CIN = U51909MH2012PTC230840

Company & Directors' Information:- J M OVERSEAS PRIVATE LIMITED [Active] CIN = U51909WB2008PTC128957

Company & Directors' Information:- D N OVERSEAS PRIVATE LIMITED [Strike Off] CIN = U24119DL1999PTC102409

Company & Directors' Information:- A-3 OVERSEAS PRIVATE LIMITED [Active] CIN = U36900HR2016PTC063750

Company & Directors' Information:- D M OVERSEAS PRIVATE LIMITED [Strike Off] CIN = U74900DL1995PTC072532

Company & Directors' Information:- OVERSEAS (INDIA) LTD [Strike Off] CIN = U51909WB1945PLC012624

Company & Directors' Information:- B N OVERSEAS PVT LTD [Strike Off] CIN = U74899DL1991PTC042764

Company & Directors' Information:- S N R OVERSEAS PRIVATE LIMITED [Strike Off] CIN = U00063KA1996PTC019873

Company & Directors' Information:- M H OVERSEAS LIMITED [Strike Off] CIN = U36911UP2000PLC025118

Company & Directors' Information:- V. R. OVERSEAS PRIVATE LIMITED [Active] CIN = U51109WB2006PTC107676

Company & Directors' Information:- I E S (OVERSEAS) PVT LTD [Active] CIN = U31200WB1974PTC029343

Company & Directors' Information:- V B OVERSEAS PRIVATE LIMITED [Active] CIN = U28995DL1996PTC077049

Company & Directors' Information:- J N OVERSEAS PRIVATE LIMITED [Active] CIN = U74899DL1994PTC060359

Company & Directors' Information:- V C OVERSEAS PRIVATE LIMITED [Active] CIN = U51900DL2007PTC166741

Company & Directors' Information:- T M K OVERSEAS LIMITED [Strike Off] CIN = U51223KL1992PLC006416

Company & Directors' Information:- V E OVERSEAS PVT LTD [Strike Off] CIN = U31909DL1981PTC011849

Company & Directors' Information:- S R D OVERSEAS PRIVATE LIMITED [Active] CIN = U52209DL2008PTC178806

Company & Directors' Information:- C M D OVERSEAS PVT LTD [Active] CIN = U74899DL1995PTC073068

Company & Directors' Information:- M B OVERSEAS PRIVATE LIMITED [Strike Off] CIN = U74899DL1994PTC061016

Company & Directors' Information:- DELHI OVERSEAS PRIVATE LIMITED [Active] CIN = U74899DL1985PTC022879

Company & Directors' Information:- B G OVERSEAS PRIVATE LIMITED [Under Process of Striking Off] CIN = U74899DL1990PTC038859

Company & Directors' Information:- M N OVERSEAS PRIVATE LIMITED [Active] CIN = U51909WB2004PTC099257

Company & Directors' Information:- R L K OVERSEAS PRIVATE LIMITED [Converted to LLP] CIN = U74899DL1991PTC043115

Company & Directors' Information:- J S R OVERSEAS PRIVATE LIMITED [Strike Off] CIN = U52399DL2009PTC190839

Company & Directors' Information:- K D OVERSEAS PRIVATE LIMITED [Strike Off] CIN = U18101DL1982PTC013342

Company & Directors' Information:- S S B OVERSEAS PRIVATE LIMITED [Strike Off] CIN = U74120WB1997PTC086041

Company & Directors' Information:- C J OVERSEAS PRIVATE LIMITED [Strike Off] CIN = U74899DL1991PTC045545

Company & Directors' Information:- A AND P OVERSEAS PRIVATE LIMITED [Strike Off] CIN = U74999DL1992PTC048780

Company & Directors' Information:- V & D OVERSEAS PRIVATE LIMITED [Strike Off] CIN = U51909DL2009PTC186537

Company & Directors' Information:- P G OVERSEAS PRIVATE LIMITED [Strike Off] CIN = U74999DL1982PTC013479

Company & Directors' Information:- S N OVERSEAS PRIVATE LIMITED [Active] CIN = U74996DL2006PTC150004

Company & Directors' Information:- D. T. OVERSEAS PRIVATE LIMITED [Strike Off] CIN = U36911UP1996PTC020289

Company & Directors' Information:- A R C OVERSEAS PRIVATE LIMITED [Active] CIN = U74899DL1989PTC036343

Company & Directors' Information:- T D OVERSEAS PRIVATE LIMITED [Strike Off] CIN = U52590DL2013PTC257410

Company & Directors' Information:- V K OVERSEAS PVT LTD [Strike Off] CIN = U18209CH1990PTC010214

Company & Directors' Information:- J B OVERSEAS PRIVATE LIMITED [Strike Off] CIN = U17220DL1983PTC016197

Company & Directors' Information:- K H OVERSEAS PVT LTD [Strike Off] CIN = U51496CH1989PTC009704

Company & Directors' Information:- A. A. OVERSEAS PRIVATE LIMITED [Strike Off] CIN = U51909PB2008PTC032010

Company & Directors' Information:- Z H OVERSEAS PRIVATE LIMITED [Strike Off] CIN = U51909MH2005PTC155819

Company & Directors' Information:- E B OVERSEAS PRIVATE LIMITED [Strike Off] CIN = U51101DL2007PTC157263

Company & Directors' Information:- A P OVERSEAS PRIVATE LIMITED [Strike Off] CIN = U51101DL2014PTC271288

Company & Directors' Information:- S H OVERSEAS PRIVATE LIMITED [Strike Off] CIN = U18101DL2002PTC116516

Company & Directors' Information:- S D S OVERSEAS PRIVATE LIMITED [Active] CIN = U51909DL2013PTC249539

Company & Directors' Information:- L T OVERSEAS PRIVATE LIMITED [Active] CIN = U15122DL2014PTC272665

Company & Directors' Information:- R P OVERSEAS PRIVATE LIMITED [Strike Off] CIN = U74899DL2000PTC108954

Company & Directors' Information:- S V OVERSEAS PRIVATE LIMITED [Strike Off] CIN = U52100DL2013PTC258278

Company & Directors' Information:- T & Y OVERSEAS PRIVATE LIMITED [Strike Off] CIN = U51505HR2012PTC047468

Company & Directors' Information:- G R D OVERSEAS PRIVATE LIMITED [Strike Off] CIN = U80301HR2012PTC046968

Company & Directors' Information:- T & T OVERSEAS PRIVATE LIMITED [Strike Off] CIN = U51900GJ2015PTC083022

Company & Directors' Information:- S K P OVERSEAS PRIVATE LIMITED [Active] CIN = U51909GJ2013PTC076553

Company & Directors' Information:- P R OVERSEAS PRIVATE LIMITED [Strike Off] CIN = U27310GJ2014PTC079227

Company & Directors' Information:- G T C OVERSEAS PVT LTD [Strike Off] CIN = U18101PB1993PTC013743

Company & Directors' Information:- D AND P OVERSEAS PRIVATE LIMITED [Strike Off] CIN = U18109DL1989PTC038623

Company & Directors' Information:- B G S OVERSEAS PRIVATE LIMITED [Strike Off] CIN = U51101PB2007PTC031400

Company & Directors' Information:- I P S OVERSEAS PRIVATE LIMITED [Strike Off] CIN = U63030DL1976PTC008356

Company & Directors' Information:- OVERSEAS SERVICE LIMITED [Dissolved] CIN = U99999MH1946PTC004911

Company & Directors' Information:- INDIA AND OVERSEAS CORPORATION LIMITED [Dissolved] CIN = U99999MH1947PTC005626

    Service Tax Appeal No. 59523 of 2013 (Arising out of Order-in-Appeal No. 37/ST/Appeal/DLH-IV of 2013) & Final Order No. 50781 of 2019

    Decided On, 17 June 2019

    At, Customs Excise amp Service Tax Appellate Tribunal Principal Bench New Delhi

    By, THE HONOURABLE MR. JUSTICE DILIP GUPTA
    By, PRESIDENT & THE HONOURABLE MR. C. L. MAHAR
    By, TECHNICAL MEMBER

    For the Appellant: Shagun Arora, Advocate. For the Respondent: Amresh Jain, Sanjay Jain, Authorised Representative (Drs).



Judgment Text

Dilip Gupta, J.

1. The Appellate Order dated 29 April, 2013 is sought to be assailed in this Appeal. This Order seeks to uphold the Original Order dated 31 March, 2011 passed by the Assistant Commissioner, Service Tax Division – I by which though sanction was granted for refund of Rs. 1,11,36,840/- claimed by the Appellant, but the said amount was directed to be credited in the Consumer Welfare Fund under Section 11B(2) of the Central Excise Act, 1944 (The Act)

2. The Appellant is engaged in the activity of providing Online Information Database Access and Retrieval Services. Acting on an intelligence that the Appellant was providing these services to its clients and was collecting service tax from them but not depositing it with the Department, the officers of the Central Excise Anti Evasion, Delhi searched the premises of the Appellant on 6 October, 2003 and found that it was engaged in providing service of “Online Information” without obtaining registration from the Service Tax Department and without payment of service tax on the services provided by them. The Appellant, however, during the course of the search, voluntarily, deposited an amount of Rs. 1 Crore. The Appellant also subsequently by letter dated 27 October, 2003 deposited another cheque of Rs. 11,36,840/-.

3. Thereafter, a show cause notice dated 24 August, 2004 was issued to the Appellant mentioning therein that it had provided online information services between 16 July, 2001 and 6 October, 2003 and even though it had received service tax for rendering taxable service to the clients but it had not discharged the service tax liability. The Appellant was, therefore, called upon to pay service tax.

4. The Appellant submitted a reply mentioning therein that the services rendered by the Appellant would fall under the category of “Commercial Training and Coaching” but computer coaching centers were exempted from payment of service tax. It was also stated that they were not liable to pay service tax but they were forced to pay service tax during investigation which should not be treated to mean that they were in agreement with the contention of the Department that they were liable to pay service tax. The adjudication officer did not accept the contentions of the Appellant and confirmed the demand and recovery of service tax. However, the amount of Rs. 1,11,36,840/- that had been paid at the time the search was conducted was directed to be appropriated towards the demand of service tax.

5. This Order of the adjudicating authority was challenged in Appeal before the Tribunal. The Tribunal examined the nature of activity of conducting online computer courses. It noticed that there were two competing entries namely “Online Information Database Access and/or Retrieval Services” defined under Section 65(75) of the Finance Act, 1994 (The Finance Act) and “Commercial Training or Coaching Service” as defined under Section 65 (27) of the Act. The Tribunal concluded that the activity would fall under the category “Commercial Training or Coaching” but since the Appellant was a computer training institute engaged in organising computer courses, it would be eligible for the benefit of Exemption Notification dated 20 June, 2003. The Tribunal, accordingly, held that the activity of the Appellant would not attract service tax. The impugned Order was, accordingly, set aside and the appeal was allowed.

6. The Appellant filed an application for refund of Rs. 1,11,36,840/- on 21 May, 2009 in pursuance to the Order passed by the Tribunal on 25 August, 2008.

7. However, after scrutinising the refund application, a show cause notice dated 23 March, 2010 was issued to the Appellant. It was noticed that though the refund claim filed by the Appellant was within the stipulated time period, but the Appellant had not produced any documentary evidence of reversing back the service tax charges claimed from the customers and the Appellant had failed to prove that the incidence of tax paid had not been passed to any other person. As such, the claim was hit by the doctrine of unjust enrichment and refund was not admissible.

8. The Appellant filed a detailed reply to the aforesaid show cause notice. It was stated that the Appellant had handed over a cheque of Rs. 1 Crore to the officials of the Anti-Evasion Wing of the Department during the raid at their premises on 6 October, 2003 and thereafter, a cheque of Rs. 11,36,840/- on 27 October, 2003 under pressure. The Appellant referred to various decisions to contend that any amount deposited during the course of investigation cannot be considered as deposit of service tax since it is merely a deposit and the issue of unjust enrichment, therefore, should not be examined and such amount should be directed to be refunded. It was also stated that this amount was shown separately in the invoices. It was also stated that the Appellant had received service charges only from different customers and so when service tax had not been collected from the customers, the question of unjust enrichment did not arise.

9. The adjudication officer, however, did not accept the contention of the Appellant regarding unjust enrichment being not applicable and, therefore, while sanctioning the refund of Rs. 1,11,36,840/- directed that it should be credited to the Consumer Welfare Fund under Section 11B(2) of the Act.

10. It is against this Order dated 31 March, 2011 that the Appellant filed an Appeal before the Commissioner(Appeals), which Appeal was rejected and the Order passed by the adjudicating authority was upheld. This Order dated 29 April, 2013 of the Commissioner(Appeals) has been assailed in this Appeal.

11. Ms. Shagun Arora, learned Counsel for the Appellant strenuously urged that the Commissioner(Appeals) committed an error in directing that the amount claimed by the Appellant should be deposited in the Consumer Welfare Fund after sanctioning it for the reason that not only had the Appellant not collected any service tax from the customers but even otherwise the question of unjust enrichment does not arise if any amount is deposited during the course of investigation as such a deposit does not amount to payment of service tax. In support of the said submission, learned Counsel for the Appellant placed reliance upon the decision of the High Court of Madras in Commissioner of Central Excise, Coimbatore Vs. Pricol Ltd. (2015 (320) ELT 703) and the decision of the High Court of Allahabad in EBIZ. Com Pvt. Ltd. Vs. Commissioner of Central Excise, Customs & Service Tax and Ors. (2016 (9) TMI 1405) The learned Counsel for the Appellant also placed reliance upon the decision of the Bangalore Tribunal in Commissioner of Customs, Bangalore Vs. Motorola India Pvt. Ltd. (2006 (206) ELT 370)

12. Shri Amresh Jain, learned Authorised Representative of the Department, however, supported the impugned Order. It was contended that when the Appellant had realised service tax from customers, the issue of unjust enrichment was required to be examined while deciding the refund application filed by the Appellant. The Appellate Authority, therefore, committed no illegality in directing the deposit of the sanctioned amount in the Consumer Welfare Fund since the Appellant failed to satisfy that the burden of service tax had not been passed to the consumers.

13. The contentions advanced by the learned Counsel for the Appellant and the learned Authorised Representative of the Department have been considered.

14. It is not in dispute that a raid had been conducted at the premises of the Appellant on 6 October, 2003 by the Officers of the Central Excise Anti Evasion on the basis of an intelligence that the Appellant was providing online information and database access and retrieval service and was collecting service tax but was not depositing the same with the Department. It is also not in dispute that during the raid the Appellant had deposited Rs. 1 Crore. According to the Appellant, this amount was deposited because officers had forced the Appellant to deposit it. It is also not in dispute that subsequently on 27 October, 2003, the Appellant deposited another cheque of Rs. 11,36,840/-. It is much thereafter on 24 August, 2004, that a show cause notice was issued to the Appellant by the Assistant Commissioner (AE) Central Excise, Delhi requiring it to explain why the amount mentioned in the notice should not be recovered from the Appellant towards service tax and why penalty should not be imposed and interest should not be charged. The demand made in the show cause notice was confirmed by the Adjudicating Officer but in the Appeal filed by the Appellant before the Tribunal, the Order was set aside and the Appeal was allowed.

15. It is as a consequence of the Order passed by the Tribunal on 25 August, 2008 that the Appellant filed an application claiming refund of Rs. 1,11,36,840/- on 21 May, 2009. The Department, however, issued a show cause notice dated 23 March, 2010 to the Appellant to explain why the refund claim should not be rejected. The Appellant filed a reply. The Assistant Commissioner by Order dated 31 March, 2011 sanctioned the refund of Rs. 1,11,36,840/- but directed it to be credited in the Consumer Welfare Fund on account of unjust enrichment.

16. The contention of learned Counsel for the Appellant is that no service tax had been collected by the Appellant from the consumers and, therefore, the question of unjust enrichment does not arise at all. Elaborating this submission, it has been contended that the Appellant had only collected “service charges” for the administrative services rendered by the Appellant and not “service tax” as claimed by the Department. The learned Counsel for the Appellant also contended that in any view of the matter, the question of unjust enrichment would not arise at all if any amount is deposited during the course of the raid, as such deposit is not payment of any amount towards service tax. This submission, needs to be addressed first.

17. The issue as to whether unjust enrichment has to be examined while considering a refund application, if any amount is deposited during investigation arose before the Madras High Court in Pricol Ltd. Investigations revealed that the assessee had cleared waste and scrap without payment of duty. Adjudication proceedings were initiated but during the pendency of these proceedings, the assessee deposited Rs. 1.55 Crores. A show cause notice dated 2 December, 1998 was, thereafter, issued to the asseesee. After adjudication, the demand was confirmed by Order dated 11 May, 2001 and the amount of Rs. 1.55 Crores deposited by the assessee was directed to be appropriated. The assessee filed an Appeal against the aforesaid Order. The Appeal was allowed by Order dated 17 December, 2004 and the Order passed by the Adjudicating Authority was set aside. The assessee thereafter filed a claim for refund of the deposit. The said refund was sanctioned by the Assistant Commissioner by Order dated 31 March, 2005. An Appeal was, however, filed by the Department. The Appeal was allowed and direction was issued to examine the plea of unjust enrichment. The assessee filed an Appeal before the Tribunal. The Tribunal held that there was no case of unjust enrichment on the facts of the case as the assessee had produced a certificate of the Chartered Accountant that refund claim had not been passed on to the customers. The Department filed an Appeal before the Madras High Court. The plea of unjust enrichment was examined and the High Court found that it was not a case of refund of duty since the assessee had deposited the amount under protest at the time of investigation. The High Court found that it was a consistent view taken by the Courts that any amount deposited during the pendency of adjudicating proceedings or investigation is in the nature of deposit made under protest and, therefore, the principles of unjust enrichment would not apply for a refund claimed for this amount. The relevant portion of the Judgement of the High Court is reproduced below:

“7. The first question of law, which is raised, relates to the plea of unjust enrichment and much emphasis is laid on the decision of the Supreme Court in Mafatlal Industries case (1997 (89) ELT 247 (SC)). Relevant portion of the order passed by the Supreme Court in Mafatlal Industries case (supra) has been extracted in the grounds (b) and (c). There is no dispute with regard to the proposition of law as laid down by the Supreme Court. In the present case, as is evident from the records, it is not a case of refund of duty. It is a pre-deposit made under protest at the time of investigation, as has been recorded in the original proceedings itself. In this regard, it has to be noticed it has been the consistent view taken by the Courts that any amount, that is deposited during the pendency of adjudication proceedings or investigation is in the nature of deposit made under protest and, therefore, the principles of unjust enrichment does not apply. The above said view has been reiterated by the High Court of Bombay in Suvidhe Ltd. v. Union of India (1996 (82) ELT 177 (Bom.)), and by the Gujarat High Court in Commissioner of Customs v. Mahalaxmi Exports (2010 (258) ELT 217 (Guj.)), which has been followed in various cases in Summerking Electricals (P) Ltd. v. Cegat, New Delhi (1998 (102) ELT 522 (All.)), Parle International Ltd. v. Union of India (2001 (127) ELT 329 (Guj.)) and Commissioner of Central Excise, Chennai v. Calcutta Chemical Company Ltd. (2001 (133) ELT 278 (Mad.)) and the said view has also been maintained by the Supreme Court in Union of India v. Suvidhe Ltd. (1997 (94) ELT A159 (SC)). There are also very many judgments of various Courts, which have also reiterated the same principles that in case any amount is deposited during the pendency of adjudication proceedings or investigation, the said amount would be in the nature of deposit under protest and, therefore, the principles of unjust enrichment would not apply. In view of the catena of decisions, available on this issue, this Court answers the first substantial question of law against the Revenue and in favour of the assessee.”

18. A similar issue arose before the Allahabad High Court in EBIZ. Com Pvt. Ltd. This Company was engaged in the business of developing and selling various online/offline educational software packages. The Anti-Evasion Branch of Central Excise Department, NOIDA conducted a search in its premises on 12 January, 2007 and got deposited service tax of Rs. 25,55,000/-. The Company was also forced to pay interest of Rs. 2,59,000/- on 21 March, 2007. Thereafter, a show cause notice dated 3 July, 2007 was issued to the Company demanding service tax. The demand was confirmed against which an Appeal was filed which was dismissed by the Commissioners (Appeals) on 29 August, 2008. The Company filed an Appeal before the Tribunal which was allowed by Order dated 23 December, 2012 and the matter was remanded to the Commissioner (Appeals). The Commissioner (Appeals), thereafter, by Order dated 29 August, 2012 allowed the Appeal and set aside the Order passed by the Adjudicating Authority. The Company thereafter, filed a refund claim on 27 January, 2014. A show cause notice dated 2 April, 2014 was issued to the Company requiring it to explain why the refund claim should not be rejected for the reason that it had not been made within one year. No Order was passed and, therefore, a writ petition was filed in the Allahabad High Court. The Allahabad High Court examined the provisions of Section 11AB of the Central Excise Act which contemplates that the amount shall be refunded to the assessee provided the incidence of such duty had not been passed on by him to any other person. The Allahabad High Court held that any amount deposited during the pendency of the adjudicating proceedings or investigation is in the nature of a deposit under protest and, therefore, the principles of unjust enrichment would not be attracted. In coming to this conclusion, the Allahabad High Court placed reliance upon the decision of the Madras High Court in Pricol Ltd.

19. The aforesaid decisions of the Madras High Court and the Allahabad High Court in Pricol Ltd. and EBIZ. Com Pvt. Ltd. were followed by the Allahabad High Court (Lucknow Bench) in Commissioner of Central Excise, Lucknow Vs. Eveready Industries India Ltd. (2017 (357) ELT 11)

20. This issue was also examined by the Tribunal in Motorola India Pvt. Ltd. The Tribunal upheld the view of the Commissioner(Appeals) that the power of unjust enrichment would not be applicable for refund of an amount deposited during investigation and the relevant paragraph is reproduced below:

“10. It is clear that the Commissioner(A) dealt with two refund claims in respect of each of the appeal filed before him. The fact that the amounts were paid during investigation is not in dispute. The duty liability on the Respondents is settled consequent to Commissioner's order dated 6.10.2003 in respect of Appeal No. 44/05. But as regards Appeal No. 45/05, the Respondents filed the refund claim before the Asst. Commissioner as earlier as 9.11.2001 though the Commissioner passed his order on 27.2.2004. The point is that in respect of both the claims, the amounts were deposited during the course of investigation by the DRI. The Commissioner (A) has elaborately discussed the issues and come to the conclusion that the excess amount deposited after taking into account the duty liability determined by the Commissioner is in the nature of a deposit and therefore, the bar of unjust enrichment is not applicable. We agree with the learned Consultant's submission (for the Respondent) that when the duty paid during the pendency of an appeal before the appellate authority is considered as deposit, there is no reason why the amount deposited during investigation cannot be considered as deposit. We also find that the decision of the larger Bench in the case of Jayant Industries (Supra) has merged with the Apex Court's decision in the case of ITC (Supra). Hence, the bar of unjust enrichment would not be applicable even to the amounts deposited during investigations. The contentions raised by Revenue are not tenable. Hence, we do not want to interfere with the findings of the appellate authority.”

21. It is, therefore, clear from the aforesaid decisions that any amount deposited during the pendency of adjudication or investigation is in the nature of a deposit and, therefore, cannot be towards payment of service tax or excise duty. The principles of unjust enrichment, therefore, would not apply if a refund is claimed for refund of this amount.

22. In the present case, it is not in dispute that the Appellant had deposited Rs. 1 Crore when the raid was conducted on 6 October, 2003 and subsequently an amount of Rs. 11,36,840/- on 27 October, 2003. Both the amount were deposited much before the issuance of the show cause notice on 24 August, 2004. It is not in dispute that on the application filed by the Appellant for refund of this amount, the adjudicating authority did sanction the refund of Rs. 1,11,36,840/- but it directed the said amount to be deposited in the Consumer Welfare Fund because of the principles of unjust enrichment. This Order was upheld by the Commissioner(Appeals) for the same reason. This view is apparently contrary to the consistent view of the High Courts and the Tribunal. The Appellant would, therefore, be clearly entitled to the refund of Rs. 1,11,36,840/-.

23. An important issue, however, will arise and which needs to be examined. This concerns the allegation of the Department that the Appellant had collected service tax from the consumers during the period in question but had not deposited it with the Government. Though the Appellant has vehemently contended that only „service charges?were collected towards administrative expenses from the consumers and no „service tax?had been collected from the consumers but this is an issue that is required to be examined in appropriate proceedings because if the Appellant had actually collected „service tax?then it cannot be permitted to retain it.

24. We find that section 73 A of the Act which came into effect from 18 April 2006, provides a complete answer to this issue. Section 73 A deals with service tax collected from any person to be deposited with Central Government. While sub-section (1) deals with service tax collected in excess of the service tax assessed or determined, sub-section (2) deals with any person who has collected any amount which is not required to be collected from any other person, in any manner as representing service tax. Sub-section (2) in such a situation would be applicable. Such a person is required to forthwith pay the amount so collected to the credit of the Central Government.

25. Sub-sections (1),(2),(3) and (4) of section 73 A are reproduced below:

(1) Any person who is liable to pay service tax under the provisions of this Chapter or the rules made thereunder, and has collected any amount in excess of the service tax assessed or determined and paid on any taxable service under the provisions of this Chapter or the rules made thereunder from the recipient of taxable service in any manner as representing service tax, shall forthwith pay the am

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ount so collected to the credit of the Central Government. (2) Where any person who has collected any amount, which is not required to be collected, from any other person, in any manner as representing service tax, such person shall forthwith pay the amount so collected to the credit of the Central Government. (3) Where any amount is required to be paid to the credit of the Central Government under sub-section (1) or sub-section (2) and the same has not been so paid, the Central Excise Officer shall serve, on the person liable to pay such amount, a notice requiring him to show cause why the said amount, as specified in the notice, should not be paid by him to the credit of the Central Government. (4) The Central Excise Officer shall, after considering the representation, if any, made by the person on whom the notice is served under sub-section (3), determine the amount due from such person, not being in excess of the amount specified in the notice, and thereupon such person shall pay the amount so determined. 26. Section 73 B deals with interest on amount collected in excess. 27. It is however the contention of the learned counsel of the Appellant that notice was not issued to the Appellant under subsection (3) of section 73A of the Act and, therefore, this amount cannot be recovered from the Appellant. 28. It shall, therefore, be open to the Department to proceed strictly in accordance with the provisions of Sections 73A and 73B of the Act to recover the amount alleged to have been collected by the Appellant as service tax after issuance of a show cause notice. The Appellant shall be given an adequate opportunity to substantiate its case that it had not collected „service tax?but had only collected „service charges?. A decision shall, thereafter, be taken without being influenced by any of the findings recorded in any Order passed earlier in the case of the Appellant. 29. The Order dated 29 April, 2013 passed by the Commissioner (Appeals) is, accordingly, set aside but is left open to the Department, if so advised, to take recourse to sections 73A and 73B strictly in accordance with law. The Appeal is allowed to the extent indicated above. The application filed by the Appellant for refund is allowed and the amount of Rs. 1,11,36,840/- shall be refunded to the Appellant within two months.
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