2015 (9) TMI 1390 - HC - Service Tax

Refund claim - the money has been deposited by the decree-holder with the Department with respect to the Service Tax which is now not applicable - Management, maintenance or repairs service in relation to Road - Held that - It is an undisputed thing that the decree holder has also filed an undertaking that the decree holder would not make any claim on the Service Tax Department or with the PWD or with any other authority with respect to the said amounts. In view of the said undertaking, there is no impediment why the Department should not pay the remaining amount deposited by the decree-holder as Service Tax. Under these circumstances, I direct that the Department shall forthwith refund the amount of ₹ 1,14,84,925/- which includes service tax element of ₹ 26,25,580/- and interest of ₹ 89,59,345/- out of the total amount of ₹ 4,76,57,617/- deposited by the decree-holder with Delhi Project. The undertaking given by the decree holder which is filed by an affidavit is duly accepted. The Department of Commissioner of Service Tax shall issue the said payment to the decree holder within four weeks - Appeal disposed of.

Issues Involved:
1. Validity and enforceability of the Arbitration Awards.
2. Determination of service tax liability and its refund.
3. Compliance with court orders and verification of deposited amounts.

Issue-wise Detailed Analysis:

1. Validity and Enforceability of the Arbitration Awards:

The execution petition was filed based on the Awards passed in favor of the decree-holder on 11th June 2009 and 11th May 2010. The decree-holder was awarded a contract for comprehensive maintenance of Ring Road and Outer Ring Road. Disputes arose during the contract period, leading to arbitration as per the General Condition of Contract (GCC). The Arbitrator initially made an award on 15th June 2009, which was set aside by the court on 19th November 2009 due to procedural issues and remitted back for rehearing. After rehearing, the Arbitrator reaffirmed the award on 11th May 2010, stating that the service tax imposed by the Central Government was prospective and reaffirming the liability of the respondent to pay the service tax. This award was upheld by the court on 19th September 2011 and further affirmed by the dismissal of an appeal on 12th March 2012.

2. Determination of Service Tax Liability and Its Refund:

The decree-holder had deposited service tax amounts from 1st August 2006 to 16th June 2011. The court directed the Service Tax Department to verify the amounts deposited. The verification confirmed a total deposit of Rs. 4,90,03,438/-. An adjudication order dated 25th November 2013 sanctioned a refund of Rs. 3,52,98,692/- (inclusive of service tax and interest) and rejected Rs. 1,14,84,925/-. The decree-holder had undertaken not to claim any further amounts from the Service Tax Department or other authorities. The court directed the Department to refund the remaining amount of Rs. 1,14,84,925/- to the decree-holder.

3. Compliance with Court Orders and Verification of Deposited Amounts:

The court issued several orders to ensure compliance and verification of the service tax amounts deposited by the decree-holder. On 3rd April 2012, the court directed the decree-holder's representative to verify the original challans with the Service Tax Department. Subsequent orders on 17th September 2013 and 26th November 2013 addressed the presence and compliance of Service Tax Department officials in court. The Service Tax Department confirmed the deposited amounts and processed the refund accordingly. The court emphasized the importance of compliance and directed the Department to refund the remaining amount within four weeks.

Conclusion:

The court upheld the enforceability of the Arbitration Awards, confirmed the service tax liability, and ensured the compliance of the Service Tax Department in verifying and refunding the deposited amounts. The execution petition and pending applications were disposed of, with no costs awarded.

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