2016 (6) TMI 363 - AT - Service Tax

Recovery of Refund erroneously sanctioned - liability of service tax under reverse charge mechanism for the period 16.11.1997-02.06.1998 under goods transport operator services. - Held that - as the order passed by this Tribunal in the case of Commissioner of Central Excise, Jaipur Vs Mangalam Cement Ltd. 2007 (5) TMI 71 - CESTAT, NEW DELHI has been set aside by the Hon ble High Court of Rajasthan reported in 2015 (2) TMI 1111 - RAJASTHAN HIGH COURT , in that circumstances, the impugned order have no legs to stand. Therefore, we hold that the refund claim sanctioned to the appellant by Ld. Commissioner (A) was correct and the proceedings initiated against the appellant by way of show cause notice become non est. - Decided in favour of appellant with consequential relief

Summary

Issues: Appeal against erroneously sanctioned refund and subsequent demand by show cause notice.

Analysis:
The appellant appealed against an order demanding a refund of &8377; 19,21,131/- due to an erroneously sanctioned refund. The case originated from a show cause notice issued for payment of service tax under reverse charge mechanism for a specific period. The appellant complied with the notice and paid the amount. However, an adjudication order was later passed demanding duty, interest, and imposing a penalty. The Ld. Commissioner (A) set aside the demand based on a previous decision, which was challenged by the Revenue before the Tribunal. The Tribunal, in a separate judgment, set aside the Ld. Commissioner's order. The appellant then appealed to the High Court of Rajasthan. During this process, both authorities confirmed the demand, leading to the current appeal before the Tribunal.

Upon hearing both parties, the Tribunal noted that the order passed by them which set aside the previous decision had been overturned by the High Court of Rajasthan. In light of this development, the Tribunal concluded that the impugned order had no basis to stand. Consequently, the Tribunal held that the refund claim sanctioned by the Ld. Commissioner (A) was correct, rendering the show cause notice issued later as non est. As a result, the impugned order was set aside, and the appeal was allowed with any consequential relief.

This judgment highlights the importance of legal precedents and the impact of higher court decisions on lower tribunal rulings. It also underscores the need for consistency and adherence to legal principles in tax matters to avoid erroneous refunds and subsequent demands.