When it is held that no Service tax is
payable, whatever has been paid by the Assessee, whether by way of tax or interest,
has to be treated as deposit and accordingly to be refunded
Roshan R Jaiswal Vs. Commissioner of Central Excise,
Nagpur [2014-TIOL-2308-CESTAT-MUM]
Roshan R Jaiswal (the Appellant) is a distributor for BSNL Prepaid Cellular services etc., and was registered with Service Tax
Department under the category of ‘Franchise service’. Pursuant to issue of Show Cause Notice dated October 16, 2008, which was adjudicated vide Order-in-Original dated August 17, 2009, the Appellant deposited an amount of Rs.24,73,590/- during the period from January 13, 2009 to November 9, 2009 which includes interest also. Although the tax and interest was deposited, the Appellant had preferred an appeal before the Commissioner (Appeals), who vide an Order dated February 15, 2010 (the Appellate Order) allowed the appeal in favour of the Appellant holding that the Appellant is a trader in SIM cards and have paid the Sales Tax on such transaction and accordingly, no Service tax is payable.
Department under the category of ‘Franchise service’. Pursuant to issue of Show Cause Notice dated October 16, 2008, which was adjudicated vide Order-in-Original dated August 17, 2009, the Appellant deposited an amount of Rs.24,73,590/- during the period from January 13, 2009 to November 9, 2009 which includes interest also. Although the tax and interest was deposited, the Appellant had preferred an appeal before the Commissioner (Appeals), who vide an Order dated February 15, 2010 (the Appellate Order) allowed the appeal in favour of the Appellant holding that the Appellant is a trader in SIM cards and have paid the Sales Tax on such transaction and accordingly, no Service tax is payable.
Consequent to allowing
of the appeal, the Appellant applied for refund for the total amount of
Rs.24,73,590/-. However, the Assistant Commissioner while adjudicating the
claim of refund, allowed refund of Rs.23,76,070/- (Rs.18,98,953/- being Service
tax and Rs.4,77,117/- towards interest) observing that as per the Appellate
Order, the amount of Service tax on the alleged value comes to Rs.18,98,953/- and
the interest on such tax comes to Rs.5,74,637/- whereas on scrutiny of the
challans it is
observed that the Appellant had paid Rs.19,96,473/- as tax and Rs.4,77,117/-
towards interest.
Accordingly, the
amount of Rs. 97,520/- was rejected on the ground of mismatch after observing
that the interest paid by the Appellant does not tally with the calculation as
per the Appellate Order.
Thereafter, the Appellant filed an appeal before the
Commissioner (Appeals), where the Commissioner (Appeals) dismissed the appeal on the ground of
time bar. Being aggrieved, the Appellant preferred an appeal before the Hon’ble
CESTAT, Mumbai.
It was held by the
Hon’ble CESTAT, Mumbaithat the amounts deposited by the Appellant whether by
way of tax or interest, assumes the character of deposit when it was held in
its favour that no Service tax is payable and/ or exigibleand therefore, the
entire amount is liable to be refunded.
Accordingly, the
Adjudicating Authority was directed to issue the refund of Rs. 97,520/- to the
Appellant within a period of four weeks.
(Bimal Jain, FCA, FCS, LLB, B.Com (Hons),
Mobile: +91 9810604563, Email: bimaljain@hotmail.com)
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