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TMI Blog2013 (2) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... of the transport operator, is liable for payment of service tax under law? (ii) Whether on the facts and in the circumstances of the case, the Tribunal was justified in law holding the refund to be recovered from the applicant and not from TISCO, especially in view of the fact that the applicant is not an assessee under the Act and TISCO is the assessee? 2. Whether Section 117 of the Finance Act, 2000 had any application to the case of the applicant and whether it was liable to pay interest @ 24% per annum in terms thereof? 3. Whether and in any event, any interest could be demanded from the applicant for the period prior to the setting aside of the refund order dated January 3, 2000 by the Commissioner in exercise of his powers under Section 84 of the Finance Act, 1994 by an order dated November 29, 2001 communicated to the applicant on December 28, 2001? 3. Brief facts of the case are that by Finance Act, 1997, service tax was imposed at the rate of 5% on various persons including Goods Transport Operators who were service providers and such tax was also recoverable by the transport service receivers. Then vide notification No. 42/97 dated 05.11.1997 the liability to pay the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted that TISCO submitted the application for refund. This fact may not be very much relevant for the purpose of deciding the question referred to us as undisputedly, the tax amount was paid by the TISCO, the service availer and it was refunded to the applicant (service provider), with consent and authorisation given by the TISCO in favour of the applicant. 5. Undisputedly, initially there was liability to pay the tax and this tax was paid by TISCO (the service availer). By virtue of the judgement of the Hon'ble Supreme Court in the case of Laghu Udyog Bharati & Others (supra) the tax collected by the Revenue was required to be refunded and there was specific order of the Hon'ble Supreme Court for refund of the collected tax. This is also not in dispute that amount was not deposited by the applicant who was the service provider, however, applicant's case throughout was that it worked as agent of TISCO and also obtained the consent letter from TISCO for receiving the amount of the tax. The position changed because of the validating Act which is Finance Act, 2000 whereby the effect of the judgement of the Hon'ble Supreme Court delivered in the case of Laghu Udyog Bha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the judgement delivered in the case of Commissioner of Central Excise, Vadodara-I Vs. Gujarat Carbon and Industries Ltd. reported in (2008) 9 SCC 518, another Supreme Court's Judgement delivered in the case of Gujarat Ambuja Cements Ltd. Vs. Union of India reported in (2005) 4 SCC 214 and also considered the scope of Section 117 of the Finance Act, 2000 whereby certain tax liabilities have been revalidated retrospectively. Learned counsel for the applicant Sri Binod Poddar, also relied upon one judgement of the Hon'ble Supreme Court delivered in the case of Commissioner of Central Excise, Meerut-II Vs. L.H.Sugar Factories Ltd. & Another reported in (2005) 13 SCC 245 wherein one order of the Tribunal with respect to the same issue as has been decided by the Division Bench of this Court in the case of Central Coalfields Limited, Ranchi, has been considered and the Hon'ble Supreme Court approved the decision of the Tribunal by incorporating the finding given by the Tribunal and, therefore, according to learned counsel for the applicant, this is a case of no liability of any of the person. Learned counsel for the applicant vehemently submitted that this fact is also not i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not affect the merit of this case. 9. Learned counsel for the TISCO did not question its liability to pay the tax which it has paid for the period pertaining to 16.11.1997 to 01.06.1998. At this juncture, it will be relevant to mention here that one notification dated 02.06.1998 also came in force exempting the payment of tax by the service provider. However, in the facts of the case also that is not much relevant because of the reason that it is the case of the Revenue also that the Revenue never demanded any tax amount from the service provider-applicant nor the service provider-applicant paid the tax amount. The tax amount was paid by the TISCO is not in dispute. The tax amount was refunded to the applicant in view of the consent given by the TISCO. 10. Learned counsel for the TISCO since has not disputed its liability to pay the tax and has not challenged any order creating liability, therefore, it is not relevant in view of the question referred to us to go into this aspect whether the TISCO was liable to pay the tax or not but still in view of the arguments advanced by the learned counsel for the applicant, learned counsel for the Revenue and learned counsel for the TISCO, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been decided against Revenue and that was the issue with respect to the scope and applicability of Section 73 of the Act. In the case of L.H. Sugar Factories Ltd. & Another, the Tribunal, after considering relevant legal position, in para-8 has specifically held that "in view of the above provision, the appellants are deemed to be persons liable to pay service tax and shall pay tax at the rate specified in Section 66" and so far as demand of interest and liability as demanded under Section 73, that has been quashed on the ground that the notice can be given by the authority only to the persons who are under obligation to file the return and have not filed the return, therefore, those judgements nowhere laid down that the service availer is also not liable to pay the service tax. Rather say, Tribunal has specifically held that service availer is and was liable to pay the Service Tax and that finding has not been reversed by the Supreme Court and the Supreme Court in the case of L.H. Sugar Factories case upheld the view of Tribunal relating to scope of Section 73 only. 13. Now the root question which survives is that whether in that fact situation where the applicant was not liable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court. In that situation, one of the legal proposition applicable is that, one who gets the benefit because of the order of the Court and that order is set aside, he is bound to restore the benefit from whom he got. Therefore, the Tribunal was fully justified in ordering the recovery of the said amount from the person to whom it was paid in view of the judgement of Supreme Court effect of which has been nullified by Finance Act, 2000. 16. Learned Commissioner, Central Excise, Jamshedpur in its order dated 29.11.2001 very rightly observed that the plain and logical consequence of making such law is to restore status quo ante and imposing a duty and obligation on the noticee who got the refund under the overruled judgement to pay back that amount. We may take help from Section 144 of the Code of Civil Procedure, which also have the similar provision, which provides that where and in so far as a decree is varied or reversed in any appeal, revision or other proceeding or is set aside or is modified in any suit instituted for the purpose, the Court which passed the decree or order shall, on the application of any party entitled to any benefit by way of restitution or otherwise, cause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unsel for the applicant, it will be appropriate to consider Section 73 of the Finance Act, 1994 and Clause (ii) of Section 117 of the Finance Act, 2000. Section 73 of the Act of 1994 is as under:- "73. Value of taxable services escaping assessment. - If (a) the Assistant Commissioner of Central Excise or, as the case may be, the Deputy Commissioner of Central Excise has reason to believe that by reason of omission or failure on the part of the assessee to make a return under Section 70 for any prescribed period or to disclose wholly or truly all material facts required for verification of the assessment under Section 71, the value of taxable service for that quarter has escaped assessment or has been under assessed, or any sum has erroneously been refunded, or (b) notwithstanding that there has been no omission or failure as mentioned in clause (a) on the part of the assessee, the Assistant Commissioner of Central Excise or, as the case may be, Deputy Commissioner of Central Excise has, in consequence of information in his possession, reason to believe that the value of any taxable service assessable in any prescribed period has escaped assessment or has been under assessed, or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vice Tax Rules, 1994, then Clause (ii) of Section 117 of the Act of 2000 will come into play. There is no relation between two sections which we have referred above and the consequent of non-payment of the amount of Clause (ii) of Section 117 of Finance Act, 2000 is provided in Clause (ii) itself. Clause (ii) of Section 117 of the Act of 2000 is not dependent upon Section 73 of the Act of 1994 nor Section 73 governs Clause (ii) of Section 117 of the Act of 2000. Therefore, in a situation where there is an obligation to file the return then only Section 73 can apply. Here in this case, it is not the case of omission or failure on the part of the assessee to make a return under Section 70 for any preceding period or and also is not the case of non-disclosure of material facts, wholly or truly, which required verification of the assessment under Section 71 or the value of taxable service for that quarter has escaped assessment or has been under assessed or any sum has erroneously been refunded obviously in a proceeding for assessment of the tax. Therefore, the judgement delivered in the case of Gujarat Carbon and Industries Ltd. has no application to the facts of the case and it may ..... X X X X Extracts X X X X X X X X Extracts X X X X
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