2015 (7) TMI 888 - HC - Service Tax

Denial of Refund claim - Unjust enrichment - Goods Transport Operator service - Held that - if the revenue was aggrieved by the OIA No.237/2005 CE, it ought to have taken such further action in accordance with law. It is trite law that once the appeal is allowed in favour of the assesse, the assessee must be entitled to all the benefit flowing there from. The Assistant Commissioner while dealing with the application for refund was not justified in sitting in judgment over the findings of Commissioner (Appeals), firstly because the Commissioner (Appeals) had passed the appellate order in a different jurisdiction and secondly because the Commissioner (Appeals) is a superior to the Assistant Commissioner. By recording a finding extracted supra, the Assistant Commissioner has clearly traversed beyond his jurisdiction. Similarly, the Appellate Authority was also not justified in rejecting the appeal filed against the order passed by the Assistant Commissioner. Thus, no exception can be taken to the order passed by the CESTAT by allowing the appeal. No substantial questions of law arises for consideration of this case - Decided against Revenue.

Issues:
1. Entitlement to invoke Section 71A of the Finance Act 2003
2. Applicability of LH Sugar Factory Vs. CEE Meerut case
3. Liability to pay Service Tax as a receiver of services

Entitlement to invoke Section 71A of the Finance Act 2003:
The case revolved around the appellant's entitlement to invoke Section 71A of the Finance Act 2003. The appellant argued that they were required to pay service tax as a service receiver from a Goods Transport Operator. The retrospective amendment of Section 65 in the Finance Act and the insertion of Section 71A mandated the service receiver to pay service tax and file returns within a specified period. The Adjudicating Authority confirmed the assessment and demanded interest under Section 75 of the Finance Act 1994. Despite the appellant challenging the original order and the Commissioner Central Excise (Appeal) setting it aside, the Revenue issued a show cause notice demanding service tax for a specific period. The Assistant Commissioner rejected the refund claim, citing the validation of the service tax levy. The subsequent appeal to the Appellate Authority and CESTAT led to the allowance of the appeal, questioning the Revenue's entitlement to invoke Section 71A retrospectively.

Applicability of LH Sugar Factory Vs. CEE Meerut case:
Another issue raised was the applicability of the LH Sugar Factory Vs. CEE Meerut case. The appellant questioned whether this case applied to their situation, especially when similar issues were pending in other civil appeals. The judgment analyzed the relevance of this case to the facts at hand and the pending civil appeals, emphasizing the need for a thorough consideration of legal precedents and pending matters before making a final determination.

Liability to pay Service Tax as a receiver of services:
The final issue centered on the liability of the respondent to pay service tax as a receiver of services. The judgment delved into the details of the service received from Goods Transport Operators during a specific period and the subsequent payment of service tax and interest by the assessee. The appellate process, including the Commissioner Central Excise (Appeals) decision and the Assistant Commissioner's rejection of the refund claim, was scrutinized. The judgment highlighted the importance of upholding appellate decisions and the jurisdictional boundaries of different authorities. Ultimately, the CESTAT's decision to allow the appeal was upheld, emphasizing that no substantial questions of law arose for consideration in the case.

In conclusion, the judgment dismissed the appeal, stating that the appellant must benefit from the appellate decision in their favor. It emphasized the adherence to legal procedures and the importance of respecting appellate authorities' decisions within their respective jurisdictions.

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