2010 (7) TMI 613 - AT - Service Tax

Refund claim - Stock broker services - Appellants have refunded brokerage with service tax but filed the refund claim beyond one year - The refund is made on the basis of reaching a specific amount of turnover over a period whereas the refund claim is for the period in which service tax was paid - Appellants failed to utilize the provisions of the law which provide for provisional assessment where the service tax cannot be determined correctly - Once the appellants were liable to refund the amount received on the basis of turnover, it was quite clear that the service tax could be determined correctly only when the period is over and the turnover is known - The relevant date is defined under Section 11B of Central Excise Act made applicable to service tax matters vide Section 83 of Central Excise Act, 1944 and while rejecting the refund claim the provisions of Section 11B have been correctly taken into account - In respect of one month the refund claim could be in time but appellants failed to provide the details separately month-wise - Hence,do not find any merit in the appeal and accordingly reject the same.

Summary

Issues:
Refund claim for excess service tax paid, rejection of refund claim by lower authorities, failure to provide necessary documentary evidence, time bar on refund claim, absence of representation by the appellants during hearings.

Analysis:
The case involves the appellants, engaged in providing 'stock broker services,' who filed a refund claim for Rs. 7,65,000 on the ground of refunding brokerage and service tax to a client. The claim lacked necessary documentary evidence like original TR-6 challans, financial statements, and client Credit/Debit Notes. The Assistant Commissioner rejected the claim as time-barred, leading to an unsuccessful appeal before the Commissioner (Appeals).

During multiple hearings, the appellants remained unrepresented without requesting adjournments. The learned DR argued that the refund claim related to excess service tax paid during a specific period, with only one payment being within the time limit for a refund. The appellants failed to provide details of the timely refund portion before the authorities, and the DR highlighted the option of provisional assessment for accurate tax determination, which the appellants did not utilize.

The judge considered the submissions and noted that the refund claim was filed beyond one year due to the turnover-based refund system conflicting with the period of service tax payment. The appellants did not opt for provisional assessment despite the uncertainty in tax calculation. The judge upheld the lower authorities' decision, citing Section 11B of the Central Excise Act, applicable to service tax matters, which defines the relevant date for refund claims. The failure to provide month-wise details of the timely refund portion further weakened the appellants' case, leading to the rejection of the appeal.

In conclusion, the judge dismissed the appeal on 29-7-2010, emphasizing the appellants' failure to comply with the law's provisions for accurate tax assessment and timely submission of refund claim details.