2015 (4) TMI 1178 - AT - Service Tax

Refund of excess tax paid - benefit of N/N. 12/2003-ST - Held that - the tax liability have not been computed, which was a basic requirement for deciding the refund claim of the appellant - there has been miscarriage of Justice - the appellant will be entitled to benefit of N/N. 12/2003-ST, if it is evident from their bills, the amount of material component or the cost of food and beverages supplied, but if the appellant have raised a consolidated bill/amount for the Mandap Keeper Service inclusive of catering charges, then they will be entitled to benefit of N/N. 12/2001-ST, as amended - matter remanded to the Assistant Commissioner, who shall re-compute the tax liability, as per the directions given by this Tribunal - appeal allowed by way of remand.

Summary

Issues:
Refund claim rejection under Notification No.12/2001-ST, applicability of Notification No.12/2003-ST, calculation of service tax liability, inadvertent mistake in non-payment of duty/tax, separate billing for food and beverages, entitlement to benefit under relevant notifications.

Refund Claim Rejection under Notification No.12/2001-ST:
The appellant's refund claim for excess tax paid under Notification No.12/2001-ST was rejected by the Assistant Commissioner, citing that the appellant continued to avail the benefit of this notification even after the amendment reducing the exemption to 40%. The Assistant Commissioner calculated the service tax liability at Rs. 14,57,308 without giving the rebate of 40% and rejected the refund claim, stating that the appellant did not opt for Notification No.12/2003-ST. The appellant contended that they had erroneously paid tax on the food and beverages component, which was not taxable. The Assistant Commissioner confirmed the service tax liability and rejected the refund claim.

Applicability of Notification No.12/2003-ST:
The Commissioner (Appeals) upheld the rejection of the refund claim, stating that the appellant's non-payment of duty/tax under Notification No.12/2001-ST was not an inadvertent mistake. The Commissioner observed that as per CBEC clarification, if separate bills are raised for food and beverages, no service tax is chargeable on those items. Since the appellant did not raise separate bills during the disputed period and admitted that the bills were inclusive of catering charges, Notification No.12/2001-ST applied. The Commissioner rejected the appeal based on these findings.

Calculation of Service Tax Liability:
The Tribunal found a miscarriage of justice in the failure to compute the tax liability, a fundamental requirement for deciding the refund claim. The Tribunal held that the appellant could be entitled to benefit under Notification No.12/2003-ST if the bills showed the material component separately. However, if the appellant raised a consolidated bill inclusive of catering charges, they would be entitled to benefit under Notification No.12/2001-ST. The Tribunal allowed the appeal, remanding the matter to the Assistant Commissioner to re-compute the tax liability as per their directions and ordered the refund of any excess amount paid within 60 days along with interest.

In conclusion, the Tribunal's decision highlighted the importance of correctly determining the tax liability and the applicability of relevant notifications in refund claims related to service tax payments on Mandap Keeper Services, emphasizing the need for proper computation and documentation in such cases.