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2017 (8) TMI 910 - HC - Service TaxRelease of seized Defendant Vessel - Held that - the Registry is directed to transfer ₹ 18,55,18,796/ with accrued interest thereon to the Service Tax Authorities by issuing a cheque in the name of State Bank of India A/c Service Tax and hand over the cheque to advocate of S5 Agency World Limited forthwith which will be deposited using the plaintiffs/applicants service tax registration number AAGCS8214FST003 and the Service Tax Authorities is directed to accept the said cheque on plaintiffs/applicants account and give necessary effect thereof. It is directed that adjustment of the service tax in the present matter would be only towards liability, if any, in the captioned suit and no other past or future service tax liability of the Applicant/Plaintiff. Assistant Commissioner CGST & Central Excise, Mumbai, Mumbai East Commisionerate, Division VI, Range V is the assessing authority for Service tax present claim. The said Service Tax Authority is expected to assess the liability as early as possible. It is therefore directed that on assessment of the service tax liability by the Assistant Commissioner CGST & Central Excise, Mumbai, Mumbai East Commisionerate, Division VI, Range V, if the above sum or any part thereof is in excess of such assessed liability, the Service Tax Authorities shall refund the such excess amount to the below mentioned account details of S5 Agency World Limited directly. Appeal allowed by way of remand.
Issues:
1. Arrest of Defendant Vessel for outstanding service tax liability. 2. Cash deposit by interested party for release of Defendant Vessel. 3. Transfer of deposited amount to Service Tax Department. 4. Undertakings by interested party regarding future liabilities and challenges. 5. Assessment of service tax liability by the Service Tax Authority. 6. Refund process for excess amount post-assessment. 7. Directions for refund handling and remittance details. Analysis: 1. The High Court granted the arrest of the Defendant Vessel for an alleged outstanding service tax liability of ?17,79,27,561 along with interest and legal costs totaling ?18,55,18,796. The Defendant Vessel was taken under arrest pursuant to the court order. 2. An interested party, S5 Agency World Limited, made a cash deposit of ?18,55,18,796 to secure the release of the Defendant Vessel. The deposit was made without prejudice to their rights and contentions, with an undertaking to deposit interest every four months. 3. The Plaintiff filed an application seeking the transfer of the deposited amount to the Service Tax Department directly, either through the court or to the Plaintiff for further remittance. The court directed the Registry to transfer the amount with accrued interest to the Service Tax Authorities for handling. 4. S5 Agency World Limited consented to make the payment under protest, reserving the right to challenge the payment and denying the claim as a maritime claim. They also reserved the right to pursue claims against the Plaintiff, including wrongful arrest, counterclaims, and damages. 5. The Service Tax Authority was directed to assess the liability promptly, with provisions for refunding any excess amount to S5 Agency World Limited directly. The Plaintiff was obligated to deposit any refund received back to the court without deductions. 6. The court discharged the undertaking for interest deposit by S5 Agency World Limited post the transfer of the amount to the Service Tax Authorities. S5 Agency World Limited undertook to pay interest on the alleged service tax liability and handle future liabilities subject to challenging the Service Tax Authorities' assessments. 7. Detailed instructions were provided for the refund process, including the account details for remittance to S5 Agency World Limited. The court allowed the application to the specified extent, with costs to the opponent/defendant.
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