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2018 (2) TMI 228 - AT - Service TaxRefund claim - Commercial or Industrial Construction Services - activity/service of Flash Butt Welding of Railway Joint of Pipes/Railway Line on Railway Contract - Held that - whatever Service Tax has been paid by the respondent and the same has been borne by the respondent only - it is an admitted fact that no Service Tax is payable on the service provided to the railways. In that circumstance, whatever Service Tax paid by the respondent, is not a Service Tax and the same is refundable to the respondent - refund allowed - appeal dismissed - decided against Revenue.
Issues Involved:
Refund claim of Service Tax paid by a contractor for services provided to railways under a contract inclusive of taxes and duties. Analysis: The case revolves around a refund claim of Service Tax paid by a contractor for services provided to railways under a contract inclusive of taxes and duties. The respondent, a contractor, believed their activity fell under "Commercial or Industrial Construction Services" and paid Service Tax from June 2011 to January 2012. However, a CBEC Circular clarified that activities under Railway Contracts were exempt from Service Tax under the same category. The respondent then filed a refund claim, which was initially rejected but later allowed by the ld. Commissioner (Appeals). The Revenue, aggrieved by the decision, contended that since the services provided to railways were exempt from Service Tax from 06/02/2008, and the respondent still chose to pay it, they are not entitled to a refund as the Service Tax was included in the contract price and recovered from the railways. However, upon examination, it was found that the prices of services rendered by the respondent to railways were inclusive of all taxes and duties. Therefore, any Service Tax paid by the respondent was borne solely by them. As no Service Tax was payable on services provided to railways, the amount paid was not legitimate and refundable to the respondent. The Tribunal, after careful consideration, upheld the decision of the ld. Commissioner (Appeals) to allow the refund claim to the respondent. It was concluded that since the Service Tax paid was not valid, being included in the contract price, and not required by law, the respondent was entitled to the refund. Consequently, the appeal filed by the Revenue was dismissed, affirming the refund to the respondent.
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