2023 (3) TMI 1011 - AT - Service Tax

Refund of service tax paid - Management or (Business) Consultant Service - refund sought on the ground that they had paid service tax through oversight because as per Service Tax Rules, tax should be collected and paid, whereas they paid the said service tax without collecting any tax amount from the customers (beneficiary farmers) - HELD THAT - The appellants are a limited company created by a resolution passed by three State Government undertakings, which are its joint promoters and therefore are implementing as a nodal agency a Micro Irrigation Scheme of Government of Gujarat. It was held by Commissioner (Appeals) that On consideration, I am in agreement with the finding of the lower authority that the above services are in different areas which enable the farmers to efficiently manage their operations with regard to using the Micro Irrigation System (MIS) which are essential for their efficient working. The Appellant provide services to the individual farmers or group of farmers, as the case may be. Taking into the account the definition of Management Consultancy Service/ Management or Business Consultancy Service as mentioned in para 9 above, and the services provided by the Appellant as discussed in the forgoing paras, the Appellants services come within the scope of Management or Business Consultancy Service. Thus, the Appellant contention that their services are primarily administrative in and they do not come within the scope of Management or Business Consultancy Service is not acceptable. There are no reason to differ with the findings of the Commissioner (Appeals) - the case law quoted by the appellant in the case of ELECTRICAL INSPECTORATE, GOVT. OF KARNATAKA VERSUS C. ST 2007 (10) TMI 137 - CESTAT, BANGALORE was properly considered and rejected by the Commissioner (Appeals). It is also found that the definition of Management Consultancy Service is comprehensive enough to cover any technical advice, assistance in relation to financial management which in this instance they were doing by identifying qualified farmers for disbursal of subsidy and were getting paid for these services to the State Government. That the amount for their services was being deducted and paid for eventually out of subsidy amount of farmers, as per the Government Scheme, is of no consequence and does not change the character of service or the service recipient. There are no merit in the appeal - appeal dismissed.

Summary

Issues Involved:
1. Classification of Services Provided by the Appellant.
2. Eligibility for Refund of Service Tax Paid.
3. Applicability of Time Bar under Section 11B of the Central Excise Act, 1944.
4. Burden of Proof Regarding Non-Passing of Tax Burden.

Summary:

1. Classification of Services Provided by the Appellant:
The Appellant, a company set up by the Government of Gujarat, was engaged in implementing a scheme for Modern Micro Irrigation Systems (MIS) for farmers. The services provided included preparing cost estimates, conducting surveys, analyzing soil and water, and assisting in financial management related to the installation of MIS. The Tribunal held that these services fall under the category of "Management or Business Consultant" as they involve technical assistance and advice in financial management and other areas essential for efficient operations. The Commissioner (Appeals) had previously upheld this classification, and the Tribunal found no reason to differ with these findings.

2. Eligibility for Refund of Service Tax Paid:
The Appellant claimed a refund of service tax paid on the grounds that the tax was paid through oversight, and their activities were administrative rather than consultancy services. However, the Tribunal upheld the decision of the lower authorities, stating that the services provided were indeed taxable under "Management or Business Consultancy Services." The Tribunal found that the Appellant's services were comprehensive enough to cover technical advice and assistance in financial management, thus justifying the payment of service tax.

3. Applicability of Time Bar under Section 11B of the Central Excise Act, 1944:
The refund claim for the period 1.4.05 to 31.03.07 was submitted on 06.05.08, which was beyond the one-year limitation period prescribed under Section 11B of the Central Excise Act, 1944. Consequently, the refund claim amounting to Rs.1,51,37,508/- for this period was deemed time-barred. The Tribunal agreed with the lower authorities that the refund claim was correctly rejected on this ground.

4. Burden of Proof Regarding Non-Passing of Tax Burden:
The Appellant failed to produce documentary evidence to show that the tax burden was not passed on to any other person, as required under Section 11B of the Central Excise Act, 1944. The Tribunal upheld the rejection of the refund claim on this basis as well, agreeing with the findings of the Commissioner (Appeals) that the Appellant did not meet the burden of proof.

Conclusion:
The Tribunal found no merit in the appeal and dismissed it, upholding the decisions of the lower authorities. The services provided by the Appellant were rightly classified under "Management or Business Consultancy Services," and the refund claim was correctly rejected on the grounds of merit, time-bar, and lack of evidence regarding the non-passing of the tax burden.