2018 (7) TMI 30 - AT - Service Tax

Refund Claim - availing small service provider scheme under N/N. 6/2005-ST dated 01.03.2005 - rejection of refund on the ground that the appellant had not opted to avail the said exemption but had chosen to pay Service Tax in the beginning of the year - Held that - As per the exemption N/N. 6/2005-ST dated 01.03.2005, there is a condition which is to be complied with by the service provider and as per the condition, the provider of taxable service has an option not to avail the exemption and such exemption once exercised in a financial year, shall not be withdrawn during the remaining part of the year - In the present case, this condition has been violated by the appellant and therefore, the Commissioner (A) has rightly come to the conclusion that the appellant is not entitled to the refund amount of 24,614/- - Appeal dismissed - decided against appellant.

Summary

Issues:
Violation of exemption condition under Notification No. 6/2005-ST dated 01.03.2005.

Detailed Analysis:

- The appeal was against the order passed by the Commissioner (Appeals) rejecting the appellant's claim for a refund of Service Tax.
- The appellant, a Chartered Accountant, provided services to three clients in 2006, with a dispute arising only with Subhash Kabini Power Corporation Ltd. (SKPCL).
- The appellant claimed a refund based on the threshold limit of exemption under Notification No. 6/2005-ST dated 01.03.2005.
- The authorities rejected the refund, stating the appellant had not opted for the exemption but paid Service Tax at the beginning of the year.
- The appellant argued that the phrase "inclusive of all taxes and duties" did not imply deduction of Service Tax, and they could avail the exemption anytime during the year.
- The AR contended that the appellant violated the condition of the exemption notification by paying Service Tax initially and then claiming exemption later in the same financial year.
- The Tribunal found the appellant had indeed violated the exemption condition by not opting for it initially, as mandated by the notification.
- Citing a similar case, the Tribunal emphasized that once the option to pay Service Tax is exercised at the beginning of the financial year, it cannot be changed later to avail the exemption.
- The Tribunal upheld the impugned order, dismissing the appellant's appeal based on the violation of the exemption condition under Notification No. 6/2005-ST dated 01.03.2005.
- The decision was pronounced in open court on 29/06/2018.

This detailed analysis highlights the key arguments presented by both parties, the interpretation of the exemption condition, and the Tribunal's decision based on legal precedents and the specific facts of the case.