2014 (5) TMI 984 - AT - Service Tax

Demand of service tax - telephone service - Notification No.36/2007-ST was issued on 15/06/2007 - Refund claim - refund claim was rejected on the ground that according to the notification only service tax which was not collected or levied, need not be collected or levied and therefore where it has been collected or paid by a service provider there is no provision for refund of the same. Unjust enrichment - Held that - appellants have brought out clearly from 21/06/2006, they collected service tax and whatever was collected has been paid and no refund has been claimed. Prior to that period, they were not charging service tax separately and obvious conclusion would be that the service tax liability which they determined was paid from their own funds. In any case, they have also produced a Chartered Accountant s certificate certifying that the service tax has not been collected. In the facts and circumstances of this case, I consider that there is no unjust enrichment. - Decided in favour of assessee.

Summary

Issues:
Refund claim under Notification No.36/2007-ST for service tax paid by telecom service provider on international inbound roaming charges.

Detailed Analysis:

1. Notification No.36/2007-ST and Refund Claim:
- The telecom service provider paid service tax under the category of telephone service to enable subscribers of a foreign telecom operator to avail international inbound roaming facility.
- Notification No.36/2007 was issued, exempting service tax on such international roaming charges not collected or levied.
- Refund claim filed by the appellants post the notification was rejected on the grounds of tax already paid and unjust enrichment.

2. Provisions of Section 11C (2) and Applicability to Service Tax:
- Lower authorities failed to consider Section 11C (2) which allows for refund when a notification exempts duty or tax.
- Section 11C (2) applies to service tax matters, enabling refund claims within six months of notification issuance.
- The provision of Section 11C (2) overrides the notification's language, making appellants eligible for a refund.

3. Unjust Enrichment:
- Appellants started charging service tax from June 2006 and paid collected amounts to the government without claiming refunds.
- The service tax liability was determined and paid by the appellants themselves, as confirmed by a Chartered Accountant's certificate.
- No unjust enrichment found due to the appellants not collecting service tax separately before June 2006.

4. Conclusion:
- The impugned order was set aside, and the appeal was allowed with consequential relief, if any, granted to the appellant.
- The judgment highlights the importance of Section 11C (2) in refund claims related to service tax matters, emphasizing the eligibility for refunds despite prior tax payments under specific notifications.