2021 (3) TMI 1005 - AT - Service Tax

Refund of service tax - business of chit funds - foreman commission was introduced in the Finance Act, 2015 - HELD THAT - The levy of service tax on foreman commission was introduced in the Finance Act, 2015 and there was no liability for payment of service tax on foreman commission till 31/03/2015. The appellant has produced Chartered Accountant certificate even before the authorities below but the learned Commissioner(Appeals) rejected the same without any legal basis. The certificate issues by the Chartered Accountant certifies that the incidence of service tax claimed has not been passed on directly or indirectly to any other person and the said amount of tax claim as refund was actually paid by the service provider. The appellant has proved that the incidence of service tax has not been passed on to anyone - the denial of refund for the period prior to 31/03/2015 is not sustainable in law - Appeal allowed - decided in favor of appellant.

Summary

Issues:
Refund of service tax paid on foreman commission prior to 31/03/2015.

Analysis:
The appellant, a private limited company engaged in chit funds, filed refund applications for service tax paid for various periods, claiming that the levy on foreman commission came into effect only from 01/04/2015. The adjudicating authority rejected the claim based on previous court decisions. The Commissioner(Appeals) upheld the rejection, citing lack of evidence that the tax burden was not passed on to customers. The appellant argued that the Delhi High Court held foreman commission outside service tax purview. The appellant presented a Chartered Accountant certificate stating non-passing of tax burden, supported by financial documents. The Tribunal noted the introduction of service tax on foreman commission in the Finance Act, 2015 and the appellant's evidence. The Tribunal found the denial of refund unjustified, as the appellant proved non-passing of tax burden through the certificate and financial documents. Consequently, the Tribunal allowed the appeal, setting aside the impugned order and granting consequential relief.

Conclusion:
The Tribunal ruled in favor of the appellant, allowing the refund of service tax paid on foreman commission before 31/03/2015. The decision was based on the appellant's evidence demonstrating non-passing of tax burden to customers, as supported by the Chartered Accountant certificate and financial records.