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2023 (5) TMI 807 - AT - Service TaxRefund of service tax with interest - Commissioner (Appeals) while deciding the appeal held that the refund claim to the appellant is admissible for the period after 18.04.2006 and could be rejected for the period prior to that - applicability of N/N. 41/2007-ST dated 06.10.2007 as amended by N/N. 17/08-ST dated 01.04.2008 - HELD THAT - Once the Commissioner (Appeals) holds that there was no liability to pay service tax prior to 18.04.2006 then the refund claim should have been decided as per the provisions of Section 11B of the Central Excise Act 1944. Undisputedly as noted by both the authorities refund claim has been filed as per Notification No. 41/2007-ST dated 06.10.2007 as amended by Notification 17/08-ST dated 01.04.2008 read with Section B of the Central Excise Act 1944 as made applicable to service tax under Section 83 of the Finance Act 1994. There being so the finding recorded by the Commissioner (Appeals) in para 6.5 itself is contrary and needs to be set aside. If the tax has been paid under mistake of law the same could have been claimed as refund by way of refund claim made under Section 11B of the Central Excise Act 1944 read with Section 83 of the Finance Act 1994. Appeal allowed.
Issues:
1. Refund claim for service tax under reverse charge mechanism. 2. Compliance with conditions for refund claim. 3. Barred by limitation - Relevant date for deciding refund claim. 4. Liability to pay service tax prior to 18.04.2006. Issue 1: Refund claim for service tax under reverse charge mechanism The appellant filed a refund claim for service tax and interest under Notification No. 41/2007-ST dated 06.10.2007 as amended by Notification No. 17/08-ST dated 01.04.2008. The original authority rejected the claim, leading to an appeal. The Commissioner (Appeals) found the refund admissible for the period after 18.04.2006 but could be rejected for the period prior to that. The appellant argued that service tax payment on services received by foreign commission agents was introduced from 18.04.2006, making payments before that voluntary. The appellant relied on various legal decisions to support their claim for refund even for the period before 18.04.2006. Issue 2: Compliance with conditions for refund claim The show cause notice raised concerns about non-compliance with conditions stipulated in the notification, late filing of the refund claim, and failure to submit relevant documents. The original authority rejected the claim based on these grounds. The appellant argued that the Revenue cannot demand service tax and interest not leviable on them, citing legal precedents to support their position. Issue 3: Barred by limitation - Relevant date for deciding refund claim The original authority rejected the refund claim as time-barred, emphasizing the relevant date for the claim. They noted that the export of goods and payment to foreign agents occurred before the service tax payment, rendering the claim ineligible. The Commissioner (Appeals) disagreed, finding the refund claim within the limit and admissible. The appellant's liability to pay service tax before 18.04.2006 was questioned, leading to a decision that the refund claim for that period could not be entertained. Issue 4: Liability to pay service tax prior to 18.04.2006 The Commissioner (Appeals) held that there was no liability to pay service tax before 18.04.2006. The appellant's payment of service tax before this date was deemed suspect, especially since a refund claim was made. The appeal challenged this observation, highlighting the need to decide the refund claim under Section 11B of the Central Excise Act, 1944 if paid under a mistake of law. The appeal was allowed based on these grounds, setting aside the Commissioner (Appeals) findings. This detailed analysis of the judgment provides insights into the issues surrounding the refund claim for service tax under reverse charge mechanism, compliance with conditions, limitation for deciding the claim, and the liability to pay service tax before a specific date.
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