The presumption of unjust enrichment is rebutted when an assessee returns the collected tax to the customer via credit notes or cash. Additionally, interest paid on amounts erroneously deposited under a mistake of law is treated as a deposit, not duty, and is not subject to Section 11B limitation.

P. ANJANI KUMAR:

M/s Jagdish Saran, the appellant assails, vide appeals No ST/50681-50682/2015-CU[DB], the impugned order dated 22.10.2014, passed by Commissioner of Central Excise and Service Tax, Lucknow.

2. Factual matrix leading to the present appeals is that the Appellant, a manufacturer of Ready-Mix Concrete (hereinafter referred to as ‘RMC’), was engaged by M/s Rosa Power Supply Company Limited (M/s RPSC) for preparing and supplying RMC and cement slurry in terms of different work orders for different periods; due to a mistaken understanding that Service Tax is payable under “Work Contract Services” as defined under Section 65(105)(zzzza), of the Finance Act the appellant obtained registration and started paid Service Tax of Rs. 1,06,31,288, for the period 05.05.2008 to 24.01.2011 along with interest of Rs. 2,33,874; the appellant has also paid VAT as applicable on part of the amount received; during the course of assessment of Sales Tax returns for the Financial Year 2007-2008, the State Commercial tax Department objected that the entire transaction between the Appellant and Rosa are of sale and accordingly, the appellant was required to pay sales tax on the total value; an Order No. J-7/2007-08/Dhara-28/21 dated 29.04.2010 was issued to this effect and the same was upheld by the Joint Commissioner of Trade Tax and further by the Hon’ble Allahabad High Court; as the service tax was not payable but paid by mistake, the appellant filed refund claims of service tax of Rs. 86,18,019 on 02.02.2012 and of interest of Rs. 2,33,874 on 29.11.2012. The appellant refunded the entire amount of service tax of Rs. 1,06,31,289, erroneously collected, to their customer/buyer M/s RPSC, by issuing credit notes dated 01.04.2012, followed by a bank guarantee dated 13.09.2013.

2.1. A Notice dated 20.03.2012 was issued to the appellants asking them to show cause as to why the refund claim should not be rejected as the supply of RMC is very well covered within the scope of works contract services as defined in Section 65(105)(zzzza) of the Finance Act, 1994; the refund was rejected vide Order-in-Original dated 21.05.2012 holding that the service tax was payable by the Appellant; on an appeal filed by the appellants, Commissioner (Appeals), vide Order-in-Appeal dated 17.09.2012, held that the supply of RMC is a pure sale contract and does not involve any provision of service and accordingly, the Appellant was not liable to pay Service Tax and the refund thereof is admissible; However, he remanded the matter back to the original authority to verify the question of unjust enrichment; the order-in-appeal was not challenged by Revenue and as such it attained finality; In remand, the Adjudicating Authority passed the Order-in-Original, dated 31.12.2013, rejecting the refund claim on holding that once the tax is collected from the service recipient, subsequent refund of the same is of no avail and the bar of the principle of unjust enrichment is not crossed; aggrieved, the Appellant filed an appeal dated 17.02.2014 before the Commissioner (Appeals).

2.2. Meanwhile, another Show Cause Notice dated 21.03.2013 was issued proposing to reject the refund of interest on ground of limitation and unjust enrichment; refund claim of interest was rejected, vide Order-in-Original dated 03.01.2014, stating that the same is barred by limitation under Section 11B . Commissioner (Appeals) took up both the appeals and passed a common