9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (11) TMI 666 - HC - Service TaxRecovery of Refund of service tax - foreign agency commission rendered - services rendered prior to 18.04.2006 - Applicability of Section 66A in the Finance Act, 1994 - HELD THAT - This Court in SOUTHERN SURFACE FINISHERS AND THRICHUR DISTRICT PADDY MARKETING AND PROCESSING CO-OPERATIVE SOCIETY LIMITED VERSUS THE ASSISTANT COMMISSIONER OF CENTRAL EXCISE, MUVATTUPUZHA AND THE ASSISTANT COMMISSIONER OF CENTRAL EXCISE, THRISSUR 2018 (11) TMI 1208 - KERALA HIGH COURT considered the Constitution Bench decision and found that the mistake if committed by the assessee, whether it be on law or facts; the remedy would be only under the statute. If that be so, the questions of law have to be answered in favour of the Revenue and against the assessee. But, however, we notice that the amounts have been refunded to the assessee as per the order of the original authority. Though, the question of law is answered in favour of the Revenue, the Revenue to be incapable of recovery of the amounts refunded as tax due - appeal is disposed of, answering the questions of law in favour of the Revenue; but restraining the respondent-Revenue from recovering the amounts refunded since as of now the levy of service tax on the payment in lieu of foreign agency commission will not be leviable as 'Business Auxiliary service' prior to 18.04.2006.
Issues:
Refund of service tax paid for services rendered before 18.04.2006 when tax was not leviable, rejection of refund claim by appellate authorities, legality of the amount collected by the department, application of Section 11B of the Central Excise Act, 1944, and the mandate of Article 265 of the Constitution of India. Analysis: The appellant, a seafood processor and exporter, sought a refund of service tax paid before 18.04.2006 when tax on foreign agency commission was not leviable. The High Court of Bombay's judgment clarified the liability for service tax from 18.04.2006 onwards, prompting the appellant to apply for a refund within eight months of the Supreme Court upholding the Bombay High Court's decision. The original authority allowed the refund claim, which was later set aside in a review and first appeal, leading to rejection by the CESTAT. The questions of law raised included the legality of the amount collected by the department, the application of Section 11B of the Central Excise Act, and compliance with Article 265 of the Constitution of India. The appellant cited a Division Bench decision emphasizing the refund due to a mistake in law, while the Standing Counsel relied on precedents highlighting the need for statutory remedies. The Court considered these arguments, noting that the amounts had already been refunded to the appellant by the original authority. In light of the legal principles discussed, including the irrelevance of equity in tax law, the Court ruled in favor of the Revenue but restrained them from recovering the refunded amounts. The Court clarified that as the service tax on foreign agency commission was not leviable before 18.04.2006, the Revenue could not recover the refunded amounts as tax due under Article 265 of the Constitution of India. Ultimately, the appeal was disposed of, with the questions of law answered in favor of the Revenue, but the recovery of the refunded amounts was restricted due to the specific circumstances surrounding the levy of service tax on payments related to foreign agency commission before 18.04.2006. Each party was directed to bear their respective costs.
|
