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2015 (2) TMI 144 - AT - Service TaxDenial of refund claim - period of limitation - whether amount paid by the Respondent should be considered as payment of duty or an amount paid as deposit - Held that - From the facts available on records service tax was paid on the amount of advances received by the Respondent but ultimately no service could be provided as the said works contract got terminated. In the case of Addition Advertising vs. UOI (1997 (7) TMI 2 - HIGH COURT OF GUJARAT (AHMEDABAD)) jurisdictional Gujarat High Court has, inter-alia, held that if no service is provided then there is no service tax. It means that once service is not rendered then no service tax is payable. Similarly Karnataka High Court in the case of CCE, Bangalore vs. Motorola Private Limited (2006 (7) TMI 223 - HIGH COURT OF KARNATAKA AT BANGALORE) held that any duty paid by mistake cannot be termed as duty . Similar view has been taken in the other case laws relied upon by the Respondent. In view of the above, it has to be held that the amounts paid by the Respondent cannot be termed as payment of duty but has to be considered as a deposit to which provisions of Section 11B of the Central Excise Act, 1944 will not be applicable. Accordingly, there is no reason to interfere with the order dated 23.7.2013 passed by the first appellate authority. - Decided against Revenue.
Issues:
1. Whether the amount paid by the Respondent should be considered as payment of 'duty' or as a 'deposit'? Analysis: 1. The appeal was filed by the Revenue against the order passed by the Commissioner (Appeals) Ahmedabad. The appellant entered into a works contract with a company and received a mobilization advance. Service tax was paid on this advance, but the contract was terminated without any services being provided. The appellant filed for a refund of the service tax paid, which was rejected by the adjudicating authority on the grounds of limitation under Section 11B of the Central Excise Act, 1944. 2. The first appellate authority allowed the appeal filed by the Respondent, relying on a case law from CESTAT Mumbai. The Revenue argued that the service tax paid should be considered as duty paid and not a deposit, making the limitation under Section 11B applicable. The Respondent, on the other hand, contended that since no service was provided, the amounts paid should be considered as a deposit, citing various case laws to support their argument. 3. The main issue was whether the amount paid by the Respondent should be classified as 'duty' or a 'deposit'. The Tribunal examined the facts and legal precedents. It was noted that if no service is provided, no service tax is payable. Case laws were cited to support the position that payments made without services rendered should be treated as a deposit and not duty. The Tribunal agreed with the Respondent's argument and held that the amounts paid cannot be considered as duty but as a deposit, exempting them from the limitation under Section 11B. 4. Ultimately, the Tribunal rejected the appeal filed by the Revenue, upholding the order passed by the first appellate authority. The decision was based on the classification of the payments as a deposit rather than duty, in line with the legal principles established in the case laws cited by the Respondent. The Tribunal found no reason to interfere with the lower authority's decision, and the appeal was dismissed.
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