2009 (1) TMI 191 - AT - Service Tax

Refund of erroneous payment Service Tax was paid on Import of Services during the period from January, 2004 to July, 2004 - The appellant paid the tax on such payment under the mistaken impression under the category of Consulting Engineering . The appellant filed refund claim. The adjudicating authority rejected the refund claim which was upheld by the Commissioner (Appeals). In view of the Larger Bench decision of the appellants own case, we hold that the appellant is not liable to pay service tax. On perusal of the aforesaid decision, we find that in the said cases, it has been held that the appellant deposited tax to the Government without remitting to the foreign company not to be refunded. The issue was decided after examining the agreement impugned order set aside matter remanded to the adjudicating authority to decide the refund claim in accordance with the law.

Summary

Issues:
1. Refund claim rejection for service tax paid to foreign-based company.
2. Liability of recipient to pay service tax on services received from abroad prior to 1-1-2005.
3. Objection raised by the Department regarding the refund claim.
4. Applicability of previous decisions on the case.
5. Decision based on Tribunal's ruling in a similar case.

Analysis:
1. The appellant filed a refund claim for service tax paid to a foreign-based company for services received between January 2004 to July 2004. The adjudicating authority and Commissioner (Appeals) rejected the refund claim.
2. The issue of recipient liability to pay service tax on services received from abroad before 1-1-2005 was referred to the Larger Bench. The Larger Bench decided that the recipient could not be held liable for paying service tax before 1-1-2005, as specified under Notification No. 36/2004.
3. The Department raised an objection to the refund claim, arguing that the appellant had already collected tax from the foreign company as per the agreement. The Department cited previous decisions to support their objection.
4. The appellant relied on a Tribunal decision in a similar case to support their claim for a refund, emphasizing that they had deposited tax to the Government without remitting it to the foreign company.
5. Based on the Larger Bench decision in the appellant's case, it was concluded that the appellant was not liable to pay service tax. The Tribunal remanded the matter to the adjudicating authority to decide the refund claim in line with the case laws and legal provisions.

This detailed analysis covers the issues of refund claim rejection, recipient liability for service tax, Department's objection, applicability of previous decisions, and the Tribunal's ruling in a similar case, providing a comprehensive overview of the judgment.