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TMI Blog2016 (6) TMI 878X X X X Extracts X X X X X X X X Extracts X X X X ..... ash Enterprise had not deposited such service tax with the service tax authorities. Held that:- Perusal of this provision would show that the powers vested with the Central Government are in the nature of garnishee enabling Central Government to recover unpaid dues of a person liable to pay the sum to the Government from any other person or requiring any other person from whom money is due or may become due to such defaulting person. The fundamental question is when the Government of India wrote letters to the FCI in the year 2015 and onwards, did FCI was there any due of Kailash Enterprise from FCI ? The answer is obviously in the negative. Section 87 of the Finance Act, 1997 was therefore wrongly invoked. - Decided in favor of petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der dated 31.03.2013 confirmed such demand against Kailash Enterprise. In such order, the competent authority accepted that no service tax was payable since under exemption notification No.10/2002 dated 01.08.2002 service provided in relation to agricultural produce was exempt from payment of service tax. However, referring to section 73A of the Finance Act, 1994 he held that now that Kailash Enterprise had recovered the tax from FCI, it must deposit with the service tax authorities. Relevant portion of the order of the Commissioner reads as under: (b) SERVICE PROVIDED TO FCI (i) The Notices has contended that the service provided to FCI were in respect of imported wheat consignments and hence they were eligible for the benefit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Out of the said amount of ₹ 7,69,65,589/- only ₹ 5,36,90,043/- pertains to FCI which is ordered to be recovered from M/s Kailash under Section 73A of the Finance Act, 1994, Rest of the amount of ₹ 2,32,75,546/- pertains to M/s GPPL, demand for which is already confirmed under Section 73(2) of the said Act as per para 6(a) above. (iii) Regarding issue of two credit notes said to have been issued by M/s Kailash to FCI, and encashment of Bank Guarantee, I find that no relief is admissible to the Notices in terms of Section 73A of Finance Act, 1994. The said Section 73A of the Act stipulates that where any person who has collected any amount representing Service. Tax such person shall forthwith pay the amount so collecte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vided by the service provider. The FCI by the year 2011-12 had also realized that the service tax collected by Kailash Enterprise was not deposited in the government revenue. Inter alia, on such grounds, some time in the year 2011, FCI utilized the performance bank guarantees issued by Kailash Enterprise to FCI and recovered a sum of ₹ 3,52,45,420/- . 5. In this background, the Government of India now seeks to recover from FCI said sum of ₹ 3,52,45,420/- under section 87 of the Finance Act, 1994. 6. Having heard learned counsel for the parties and having perused documents on record, it emerges that the FCI had no service tax liability on the cargo handling service received by it from Kailash Enterprise for handling of wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to the credit of the Central Government. (2) Where any person who has collected any amount, which is not required to be collected, from any other person, in any manner as representing service tax, such person shall forthwith pay the amount so collected to the credit of the Central Government. (3) Where any amount is required to be paid to the credit of the Central Government under subsection (1) or subsection (2) and the same has not been so paid, the Central Excise Officer shall serve, on the person liable to pay such amount, a notice requiring him to show cause why the said amount, as specified in the notice, should not be paid by him to the credit of the Central Government. (4) The Central Excise Officer shall, after consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted, he has to forthwith pay the amount to the credit of the Central Government. Under sub section (3) of section 73A when the person liable to deposit such sum to the credit of the Central Government fails to do, the competent authority would serve upon him a notice why such sum should not be credited to the Central Government and thereafter, proceed to recover the same. 8. The order passed by the Commissioner directing Kailash Enterprise to deposit his service tax with the Central Government was therefore, in tune with provisions contained in section 73A of the Act. However, FCI already having paid such sum to Kailash Enterprise, had no further liability to deposit any part thereof with the Government, particularly, when no service tax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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