2013 (11) TMI 1598 - HC - Service Tax

Summary

Issues involved: Challenge to Order No. 525 of 2006 passed by the Customs, Excise and Service Tax Appellate Tribunal, Chennai regarding liability to pay service tax for the months of July and August, 1999.

Summary:
The judgment pertains to a Civil Miscellaneous Appeal challenging the Order No. 525 of 2006 passed by the Customs, Excise and Service Tax Appellate Tribunal, Chennai. The core issue revolves around the liability of the respondent, who is engaged in clearing and forwarding services, to pay service tax for the months of July and August, 1999. The appellant, Commissioner of Central Excise, contests the Tribunal's decision to refund the service tax paid by the respondent based on subsequent legal developments.

The appellant argues that as per a previous decision and subsequent amendments to the Finance Act, the liability to pay service tax was shifted to the service recipient from 1-9-1999 onwards. The service tax due from the respondent for the months of July and August, 1999 falls under the previous regime where the recipient was liable to pay the tax. Therefore, the Tribunal's order to refund the tax paid by the respondent is deemed erroneous by the appellant.

The respondent, on the other hand, acknowledges the legal developments cited by the appellant, indicating an agreement on the legal position regarding the liability to pay service tax for the relevant period.

The Court, after considering the legal framework and arguments presented, concludes that the respondent, as the service recipient, is indeed liable to pay the service tax that accrued prior to 1-9-1999. Since the service tax in question pertains to the months of July and August, 1999, the tax paid by the respondent for these months is not refundable. Consequently, the Court finds merit in the appellant's contentions and allows the Civil Miscellaneous Appeal, setting aside the Tribunal's order to refund the service tax to the respondent.

In conclusion, the Civil Miscellaneous Appeal is allowed without costs, and the Tribunal's Final Order No. 1484 of 2005 is overturned.