2020 (2) TMI 45 - AT - Service Tax

Refund of service tax - time limitation - refund sought on the ground that they have paid Service Tax and GST on the same four transactions. - HELD THAT - This tax liability was correctly paid and declared by them in their ST 3 Returns for the period April to June 2017. The said amount of Service Tax was paid through debit in their CENVAT credit at that time. GST Regime came into being w.e.f. 01.07.2017 and subsequently between September and November the appellant raised Credit Notes and another four invoices and paid GST on the same. After paying the GST the appellants are seeking refund of the Service Tax of 17, 84, 952/- which was paid during the period April to June 2017 on the ground that they have paid Service Tax and GST on the same four transactions. Further when the Service Tax was paid on the basis of self-assessment and declaration in their ST 3 Returns for the period April to June 2017 the Service Tax was paid correctly for the services which were provided during the period April to June 2017 as per Section 68 of the Act. There is no infirmity in the impugned order which is upheld by dismissing the appeal of the appellant - decided against appellant.

Summary

Issues:
Refund of Service Tax under Section 11B of Central Excise Act, 1944; Rejection of refund claim by Asst. Commissioner; Appeal before Commissioner (A); Denial of refund claim; Validity of refund under GST Regime; Cancellation of invoices and raising of Credit Notes; Interpretation of Article 265 of the Constitution; Applicability of relevant case laws.

Analysis:
The judgment involves an appeal against the rejection of a refund claim for Service Tax amounting to ?17,84,952/- under Section 11B of the Central Excise Act, 1944, filed by the appellant who provided Business Management & Consultancy Services. The appellant raised invoices on three clients, charging Service Tax for the period from April 2017 to June 2017. The Asst. Commissioner rejected the refund claim, stating that subsequent issuance of GST invoices did not entitle refund of Service Tax paid earlier. The appellant appealed to the Commissioner (A) who also dismissed the appeal. The primary issue was whether the appellant was entitled to a refund given the subsequent issuance of GST invoices.

The appellant contended that the authorities failed to appreciate that they paid both Service Tax and GST on the same transactions, and argued that the authorities were duty-bound to refund the erroneously collected amounts. The appellant relied on various decisions to support their claim. They further argued that the cancellation of previous invoices and issuance of Credit Notes should nullify the earlier Service Tax liability. On the other hand, the AR defended the impugned order, stating that Service Tax paid under the Finance Act could not be refunded under the GST regime.

After hearing both parties, the Tribunal found that the appellant paid Service Tax correctly for services rendered before the introduction of GST. The Tribunal noted that the subsequent issuance of GST invoices did not alter the fact that Service Tax was correctly paid as per the law applicable at that time. The Commissioner (A) provided detailed reasoning for denying the refund claim, citing relevant provisions of the CGST Act and emphasizing that the Service Tax paid was legitimate and not refundable under Section 11B of the Central Excise Act. The Tribunal upheld the impugned order, stating that the case laws cited by the appellant were not applicable to the present case.

In conclusion, the Tribunal dismissed the appeal, finding no infirmity in the impugned order. The judgment clarifies the distinction between Service Tax paid under the Finance Act and subsequent GST payments, emphasizing the legality of the original Service Tax payments and the inapplicability of refund provisions under the Central Excise Act in this context.