2014 (10) TMI 602 - AT - Service Tax

Adjustment of tax - Management and repair services - money deposited by the respondent in the old Service Tax registration code belonging to the partnership firm - Held that - Admittedly, the Service Tax was wrongly deposited in a wrong code belonging to partnership firm which was dissolved at the relevant time. As such, it is a mistake on the part of the respondents which is required to be rectified and the amount deposited in the partnership firm is required to be adjusted in the assessee s registered code - Decided against Revenue.

Summary

Issues: Refund claim of Service Tax paid in a wrong code belonging to a dissolved partnership firm.

Analysis:
1. The issue in this case revolves around a refund claim of Service Tax paid by a partner of a dissolved partnership firm in a wrong code belonging to the firm. The partnership firm was dissolved, and the appellant was granted fresh registration as an individual. The respondent partner filed a refund claim of &8377; 9,39,564/- for the Service Tax paid by him, seeking adjustment of the amount deposited in the wrong code.

2. The Deputy Commissioner of Central Excise initially disallowed the adjustment claimed by the respondent. However, on appeal, the Commissioner (Appeals) recognized the eligibility of the respondent to claim the refund if admissible. The Commissioner observed that the amount in question did not pertain to any outstanding liability of the partnership firm and was a mistake on the part of the respondent. The Commissioner allowed the adjustment, considering the money deposited in the old Service Tax registration code as belonging to the respondent individually.

3. The appellate authority upheld the decision of the Commissioner (Appeals), emphasizing that the Service Tax was indeed wrongly deposited in a code belonging to a dissolved partnership firm. The mistake made by the respondent needed rectification, and the amount deposited in the partnership firm's code had to be adjusted in the individual's registered code. The tribunal found no infirmity in the decision of the appellate authority and rejected the appeal accordingly.

4. The judgment highlights the importance of rectifying inadvertent errors in tax payments, especially in cases involving changes in business structures like partnership dissolution. It underscores the principle of ensuring that tax payments are correctly attributed to the appropriate entities, even in situations where administrative mistakes occur. The decision ultimately favored the individual's right to claim a refund for taxes paid erroneously in the context of a dissolved partnership firm.