2009 (8) TMI 960 - Commissioner - Service Tax

Summary

Issues:
1. Eligibility for refund of excess Service tax paid.
2. Interpretation of exemption provisions under Notification No. 6/2005-S.T.
3. Small Scale provider exemption criteria under the notification.

Issue 1: Eligibility for refund of excess Service tax paid
The appellant filed a refund claim for Rs. 98,880/-, stating that he paid excess Service tax of this amount due to not deducting the basic exemption of Rs. 8 lakhs from a commission of Rs. 20 lakhs received. The adjudicating authority rejected the refund claim, stating that once the exemption is not availed, it cannot be changed throughout the financial year. The appellant argued that he satisfied all conditions under the Notification and was eligible for the refund.

Issue 2: Interpretation of exemption provisions under Notification No. 6/2005-S.T.
The Assistant Commissioner held that the appellant cannot claim exemption after paying Service tax without exercising the option provided under Notification No. 6/2005-S.T. The appellant contended that the option to avail exemption should be expressed by the service provider alone. The Commissioner noted that there is no provision allowing the appellant to change the option once exercised, either to avail exemption or pay tax without it, rendering the appellant ineligible for the refund on this ground.

Issue 3: Small Scale provider exemption criteria under the notification
The appellant's eligibility for Small Scale Industries (SSI) exemption under Notification No. 6/2005-S.T. was also questioned. The notification provides exemption to service providers whose taxable service value does not exceed Rs. 8 lakhs in a financial year. Since the appellant's first commission itself was Rs. 20 lakhs, he was deemed ineligible for the SSI exemption. The Commissioner emphasized that the appellant, by receiving a commission exceeding Rs. 8 lakhs, did not meet the criteria for deducting Rs. 8 lakhs from his commission and had to pay duty on the total commission amount.

In conclusion, the Commissioner rejected the appeal, upholding the order passed by the Assistant Commissioner, Central Excise & Service Tax, Panaji, based on the grounds that the appellant did not meet the criteria for refund eligibility, interpretation of exemption provisions, and the Small Scale provider exemption criteria under the notification.