2017 (12) TMI 1027 - AT - Service Tax

Refund claim - service tax paid under mistake - time limitation - reference of matter to Larger Bench - Held that - When the very scope and ambit of Notification No.22/2006-ST is under sub-judice before the Apex Court, it is premature on the part of the Tribunal to decide that issue and overreach the jurisdiction of the Apex Court - appeal is remanded to the adjudicating authority.

Summary

Issues:
1. Whether taxes paid on certain services by the assessee, which were later deemed non-taxable, are eligible for refund without any time bar.
2. Whether services provided by the appellant bank, such as disbursing pensions and making salary payments, are exempt from service tax.
3. Whether the appellate Commissioner correctly examined the question of refund without considering the law relating to the levy of service tax.
4. Whether the Tribunal can decide on the issue of exemption under Notification No.22/2006-ST while the matter is sub-judice before the Apex Court.

Analysis:
1. The assessee contended that taxes paid on services later found to be non-taxable should be refunded without any time bar. The appellant bank argued that services like disbursing pensions and making salary payments should be exempt from service tax, seeking a refund of the taxes paid. The adjudicating authority rejected this plea, citing the taxable nature of the services based on specific notifications. The Revenue supported this stance, referencing a show-cause notice to deny any benefit under the said notification.

2. The appellate Commissioner's order focused on the admissibility of the tax refund without delving into the levy of service tax. The Revenue highlighted ongoing litigations before the Apex Court involving similar issues in cases like Canera Bank and ICICI Bank, suggesting that no refund should be granted. In contrast, the appellant cited a precedent set by a Larger Bench of the Tribunal in a different case, emphasizing the entitlement to exemptions under Notification No.22/2006-ST.

3. However, the Tribunal acknowledged the pending matters before the Apex Court and the potential impact on decisions related to the scope of Notification No.22/2006-ST. Considering the unsettled nature of the legal interpretations and the principle of not overreaching the jurisdiction of the Apex Court, the Tribunal decided to remand the appeal back to the adjudicating authority for further consideration in light of the outcomes of the Canera Bank and ICICI Bank cases.

4. The Tribunal's decision to defer the judgment and await the resolution of related cases before the Apex Court reflects a cautious approach to avoid conflicting interpretations and to ensure compliance with higher judicial authority. By sending the matter back to the adjudicating authority for reevaluation based on the evolving legal landscape, the Tribunal aimed to uphold the principles of due process and judicial hierarchy in resolving the issue of tax refund and service tax exemption for the appellant bank.