2018 (2) TMI 326 - AT - Service Tax

Refund claim - service tax paid on the transaction between the two Divisions of the legal entity, which was not required to be paid - denial on the ground that the assessment becomes final and was not challenged in appeal - Held that - the decision of the Rajasthan High Court in the case of Central Office Mewar Palace Org. Vs. Union of India 2008 (10) TMI 47 - RAJASTHAN HIGH COURT , is squarely applicable in the facts and circumstances of this case, where it was held that tribunal is not justified in rejecting the refund claim on the ground that assessee has not challenged assessment order - appeal allowed - decided in favor of appellant.

Summary

Issues:
Refund application rejection based on non-challenge to assessment order.

Analysis:
The appeal was against the Commissioner (Appeals) order allowing the Department's appeal, setting aside the Order-in-Original regarding a refund application. The appellants, a service provider, sought a refund of service tax paid on an inter-division transaction within a single legal entity. The Deputy Commissioner approved the refund, stating the tax incidence wasn't passed on and unjust enrichment didn't apply. However, the Department appealed, arguing the appellants did not challenge the assessment by filing a revised return. The Commissioner (Appeals) upheld this, citing non-filing of a revised return after self-assessment.

The consultant for the appellant contended that the impugned order misapplied the law and relied on irrelevant precedents. They argued that the cases cited by the Department were inapplicable, distinguishing them from the present case. Referring to a Tribunal decision in a similar matter, they asserted that challenging one's self-assessment was impractical and no appellate authority was designated for such challenges. Additionally, they cited a Rajasthan High Court ruling emphasizing the lack of provisions for challenging self-assessment orders, supporting the appellant's position.

The consultant further highlighted a Division Bench ruling that upheld the validity of a refund claim based on self-assessment, indicating that self-assessment should not be equated with an assessment by an officer under Section 73. The Assistant Commissioner, however, reiterated the impugned order's findings.

Upon review, the Tribunal found the Rajasthan High Court's decision, subsequently endorsed by the Tribunal's Division Bench, directly applicable to the case. Based on this precedent, the Tribunal deemed the impugned order legally unsustainable and set it aside, allowing the appellant's appeal with any consequential relief.

In conclusion, the Tribunal overturned the Commissioner (Appeals) decision, emphasizing the applicability of the Rajasthan High Court's ruling regarding the challenge to self-assessment orders for refund claims, ultimately granting relief to the appellant based on established legal principles.