Service Tax
TRT-2025-
Cestat New Delhi
Date:-21-07-22
In:-
Issue Favourable to Tax Payer ?:- 0
Order Date: 21 July 2022
Facts:
- The appellant, M/s Anurag Enterprises, had provided works contracts services to National Building Construction Corporation in terms of a contract that was entered when there was no levy of Service tax on such services under an exemption notification.
- The said exemption was withdrawn as a result of which the services rendered became leviable to Service tax. The Service tax liability was to be divided equally between the appellant and NBCC.
- The appellant believed that it was not liable to pay Service tax even after withdrawal of the exemption notification and, therefore, did not pay service tax. However, NBCC made the payment of 50% portion of service tax, but deducted it from the payments due to the appellant and deposited the same with the jurisdictional authorities.
- Thereafter, by a notification the Government restored the exemption earlier granted to services as a result of which the service tax deposited by NBCC became refundable.
- The appeal filed by the appellant before the first appellate authority was also rejected and held that as the appellant had not paid any tax it could not claim refund and that there were no documents to support the fact that NBCC had not passed the burden of tax to any other person.
- Being aggrieved the appellant filed this appeal.
Issue:
- Whether the appellant is entitled to refund of the Service tax which was deducted from the payments made by NBCC to the appellant?
Order:
- The Authorities observed that the appellant had produced certificates of the chartered accountant certifying the fact that it was claiming the said amount in their balance sheet as receivable. This apart, the departments at Greater Noida and Delhi have sanctioned the refund observing that the appellant had borne the incidence of tax as NBCC had deducted it from the payments made to the appellant. The alleged ground of unjust enrichment is, therefore, misconceived. There is no factual distinction between the refund claimed at Jaipur Commissionerate and between the Greater Noida and Delhi Commissionerate when the refund claims have been allowed.
- The finding recorded in the impugned order while rejecting the refund claim filed by the appellant that only NBCC could have claimed refund is also erroneous for the reason that earlier the claim filed by the NBCC had been rejected for the reason that it had not borne the incidence of tax.
- Therefore, the appellant is clearly entitled to refund of the Service tax which was deducted from the payments made by NBCC to the appellant.
- Accordingly, the impugned order is set aside with a direction to the authority to refund the amount claimed by the appellant with interest at the applicable rate.
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