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2022 (3) TMI 985 - AT - Service TaxRefund/rebate claim of excess service tax paid - applicability of N/N. 30/2012 ST dated 06.09.2004 - HELD THAT - In the case of WAY2WEALTH BROKERS PVT. LTD. VERSUS COMMISSIONER OF CENTRAL TAX (EARLIER COMMISSIONER OF SERVICE TAX, BANGALURU 2021 (10) TMI 488 - KARNATAKA HIGH COURT , the Hon ble jurisdictional High Court of Karnataka had an occasion to consider a similar dispute and it was held that Mere payment made by the assessee will neither validate the nature of payment nor the nature of transaction. The same could not make it a service tax. When there is a lack of authority to collect such service tax not liable to be paid by the assessee, it would not give the Department the authority to retain the amount paid by the assessee. Therefore, mere nomenclature would not be an embargo on the right of the petitioner to demand refund of payment made under a mistaken notion. In view of the decision of the Hon ble Jurisdictional High Court of Karnataka, the action of the adjudicating authority in sanctioning refund is held to be in order. Appeal allowed - decided in favor of appellant.
Issues:
1. Refund application filed by the appellant. 2. Consideration of law laid down by the Hon'ble High Court of Kerala. 3. Eligibility for refund of service tax. 4. Appeal filed by the Revenue against the order of the adjudicating authority. 5. Grounds of appeal by the Revenue. 6. Cross-objections filed by the assessee. 7. Decision of the Commissioner (Appeals) on the appeal and cross-objections. 8. Applicability of previous judgments by different High Courts. 9. Recovery of refunded amounts by the Revenue. 10. Interpretation of Section 11B of the Act, 1944 by the High Court of Karnataka. 11. Validity of the sanction of refund by the adjudicating authority. Analysis: 1. The appellant filed a refund application for a specific amount based on a previous order by the Bench, leading to a reconsideration by the adjudicating authority. The authority found the appellant eligible for a refund due to excess service tax liability and compliance with Notification No. 30/2012 ST. 2. The Revenue appealed the adjudicating authority's order, arguing that it lacked findings regarding the timeliness of the original claim in line with the judgment of the Hon'ble High Court of Kerala in a specific case. The Commissioner (Appeals) set aside the sanction order, referencing a different case law that deemed the previous judgment not applicable. 3. The Commissioner's decision was influenced by a subsequent judgment by the Hon'ble Kerala High Court, stating that once amounts are refunded, the Revenue cannot recover them as tax due. This restraint on recovery applied to the present case, even if the Revenue was correct in its claims. 4. Another case from the Hon'ble jurisdictional High Court of Karnataka was cited, emphasizing that amounts paid under a mistaken notion, not liable to be paid, are refundable. The lack of authority to collect such payments does not authorize the Department to retain them, as validated by previous court decisions. 5. Considering the above legal precedents, the Commissioner (Appeals) erred in setting aside the refund sanction, as it contradicted established case law and the non-recoverability of refunded amounts. Therefore, the impugned order was overturned, and the appeal was allowed in favor of the appellant.
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