Service Tax Refund - Relevant Date - from Tribunal's order
HERE is an interesting case:
The assessee was registered for providing various financial services like hire purchase service, leasing service etc. under the category of banking and other financial service brought into service tax purview w.e.f. 16/07/2001. Proceedings were initiated against the assessee on the ground that they had not paid the entire amount of tax payable because they had not added certain charges collected by them. As a result of the proceedings, net service tax payable by them was worked out as Rs.12,59,368/- with interest and penalty was also imposed. Thereafter the matter reached the Tribunal and as per the Final Order reported in the Tribunal by its order dated 12.11.2007, held that the services rendered by the assessee fell under hire purchase finance scheme and not hire purchase scheme and therefore assessee was not liable to pay service tax.
Thereafter, the assessee filed a refund claim on 24.09.2008. The refund claim was rejected as hit by limitation as it was filed beyond the period of one year.
On an appeal filed by the assessee, Commissioner (Appeals) held that the assessee was eligible for the refund since they had filed the refund claim within one year from the date of passing of the Tribunal order and the payment of service tax from 2001 onwards can be viewed as without any authority of law. Accordingly Commissioner (Appeals) held that rejection of refund on the ground of limitation is not sustainable.
Revenue is in appeal against the impugned order allowing the refund.
The Tribunal observed,
In this case, proceedings were initiated by the Revenue on the ground that appellant was not paying service tax on the full value and were not including certain charges levied by them. The adjudicating authority confirmed the demand of service tax amounting to Rs.30,95,926/- out of which he appropriated the amount of Rs.18,36,558/- already paid by the assessee. From the proceedings initiated resulting in the OIO, it is seen that the Department had reopened the assessment for the entire period from 2001 onwards.
Ultimately, the service itself was held not liable to tax at all.
Having reopened the assessment in its entirety, demanding the entire amount of tax payable and appropriating whatever already has been paid, the net result is that the Departmental officers have reopened the entire assessment and therefore the refund claim filed by the assessee after the Final Order was passed by this Tribunal holding that no tax was liable to be paid, has to be considered as one arising as a result of the Tribunal order and therefore the time limit cannot be accounted from the date of payment of tax.