Custom, Excise & Service Tax Tribunal
M/S. State Bank Of Hyderabad, Metapalli vs Cc,Ce&St, Hyderabad-Iii on 16 July, 2013
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT BANGALORE
Bench SMB
Court I
Date of Hearing:16/07/2013
Date of decision:16/07/2013
Appeal No.ST/661/2011
(Arising out of Revision Order No.12/2010-ST-HYD-ADJN(COMMR) dt. 30/11/2010 passed by CC,CE&ST, Hydeabad-III)
M/s. State Bank of Hyderabad, Metapalli
..Appellant(s)
Vs.
CC,CE&ST, Hyderabad-III
..Respondent(s)
Appearance Mr. S. Ananthan, Chartered Accountant for the appellant.
Mr. A.K. Nigam, Addl. Commissioner(AR) for the respondent.
Coram:
Honble Mr. B.S.V. Murthy, Member(Technical) FINAL ORDER No._______________________ [Order per: B.S.V. Murthy] Metapalli Branch, Karimnagar District, Andhra Pradesh of State Bank of Hyderabad, during the year 2008-09, while calculating service tax payable month-to-month, made a mistake which led to excess payment of service tax. The Branch was charging commission inclusive of service tax and the service tax amount was not mentioned separately in their ledgers. The service tax was calculated on the total commission received treating the same as cum-tax receipt. By mistake, while paying service tax, the concerned person went on paying service tax on the cumulative amount instead of paying service tax on the commission received during the month. This was noticed by the internal audit team of the Bank and a refund claim was made for Rs.1,41,528/-. The refund was sanctioned by the original adjudicating authority. However, the Commissioner, in exercise of the power vested in him under Section 84 of the Finance Act 1994, issued a show-cause notice proposing revision of the order on the ground that the refund claim was hit by unjust enrichment clause and the appellant was required to show that there is no unjust enrichment. The appellant before the Commissioner submitted that what had happened was a clerical error and no excess amount of service tax was collected but only excess amount was paid and further produced Chartered Accountants certificate. However, the Commissioner took a view that the certificate of Chartered Accountant was not sufficient to show that there was no unjust enrichment and accordingly denied the eligibility for refund and demanded the amount already sanctioned. The appellant is in appeal against this order dt. 30/11/2010.
2. In the meanwhile, the original adjudicating authority who had sanctioned the refund in the first place also issued a show-cause notice requiring the assessee to show cause as to why the refund claim should not be denied on the ground of unjust enrichment under Section 11A of Central Excise Act, 1944. While issuing the show-cause notice, the original adjudicating authority also took note of the fact that the Commissioner had already reviewed the Order-in-Original on the ground that the Assistant Commissioner had not examined the records properly. The Deputy Commissioner proceeded to consider the issue and passed an order on 31/03/2011 and sanctioned the refund once again. The learned Chartered Accountant submits that this has been challenged by the Revenue by filing an appeal before the Commissioner(Appeals) and the fate of that appeal is not known and according to the Chartered Accountant, it is still pending.
3. The above observation would show that we have two orders, one passed by Commissioner taking a view that appellant has not passed the hurdle of unjust enrichment and required the appellant to pay back the refund already received by them and another order passed by the Deputy Commissioner subsequently which takes the view that the refund sanctioned originally was correct and there is no need for the appellant to repay. Thereby the appellant has two orders now. This unfortunate situation has arisen because the Deputy Commissioner passed the order on a show-cause notice when the Commissioner had already confirmed the demand for refund already sanctioned without waiting for the matter to attain finality before the Tribunal on the order passed by the Commissioner and without ascertaining whether that order has been challenged or not which should not have been done. The result is parallel litigation on the same issue and contemporary orders by two officers of the Department contradicting to each other which does not speak well of the supervision/control/management in the Department.
4. In any case, it is not the job of the Tribunal to look into such problems.
5. However, since the order of the original authority passed on 31/03/2011 has been placed before me, it would be worthwhile taking note as to how the Deputy Commissioner proceeded to pass an order. He has observed that the ledgers which are the subject matters and which are the cause for excess payment had not been produced before the Commissioner and he has seen these ledgers and he has satisfied himself after going through the ledgers that excess payment has been made and that as submitted the entire amount of commission received was received as cum-tax receipt and tax was paid by the Bank and therefore the question of excess recovery may not arise. According to Deputy Commissioner, the appellant has been able to show effectively that the excess service tax has been paid and the same has not been collected and after going through the general ledger account and other relevant documents, ST-3 returns and TR6 challans, he has recorded a finding that there was no unjust enrichment. He has also recorded that excess payments were reflected as receipts in the general ledger account and there was no corresponding debit entries in the name of any of their customers. Therefore, the incidence of tax was not passed on to any other person.
5. Besides these observations, I also find that when we take into account the size of the Bank and size of the transactions, it would be virtually impossible to make appropriate notes in the balance sheet or annual report of the Bank about this specific amount since the operation is so big and the Bank has more than 1500 branches. In such a situation, looking for evidence to show that unjust enrichment is not there in the balance sheet or annual report may be a futile exercise. Therefore, I also find that the procedure adopted by the original adjudicating authority while adjudicating the second show-cause notice cannot be found fault with, even though it may not be appropriate to take it as a basis for coming to the conclusion in favour of the appellant but it can definitely be taken note of. Since the departmental officer has verified records and has come to the conclusion and I am also satisfied that this kind of a situation cannot lead to unjust enrichment, I consider that the appeal can be allowed. Accordingly, the appeal is allowed.
(Pronounced and dictated in open court) (B.S.V. MURTHY) MEMBER (TECHNICAL) Nr 6