ST - Mandap keeper collecting advance from customers and depositing ST - Venue sealed by Municipality and appellant returns booking with ST to customers - appellant can avail credit of such excess ST paid - appeal allowed: CESTAT
By TIOL News Service
AHMEDABAD, MAR 28, 2013: THE appellants are engaged in providing taxable service under the category of ‘Mandap Keeper'. The appellant have collected some advance payment along with Service Tax from the customers and deposited such Service Tax collected to the Government account. Subsequently, the party plot was sealed by an order of Ahmedabad Municipal Corporation due to which the party plot could not be given for the intended purposes. The appellant cancelled the bookings for the party plots and at the request of customers refunded the booking amount along with the Service Tax collected by them.
The appellants filed a refund claim before the lower authorities. The adjudicating authority allowed the refund of part amount and rejected the part amount in both these appeals as being time barred as per the provisions of Section 11B.
Since the Commissioner(A) rejected their appeals, the appellants are before the CESTAT.
It is submitted that -
+ the provisions of Rule 6(3) of STR, 1994 would apply and the appellant is eligible to avail the credit of such Service Tax paid by the appellant as he has refunded the amount to the service recipient along with Service Tax.
+ it is not in dispute that the appellant has refunded the entire amount of Service Tax as well as the advance received from his customers and both the lower authorities had considered the provisions of Section 11B but have over-ruled the provisions of Rule 6(3) of Service Tax Rules, 1994.
The Revenue representative stuck to the view taken by the lower authorities.
The Bench observed -
"7. The undisputed fact in this case is that the appellant has collected some advance amount for the party plots which were given by them to their service recipients for functions. It is also undisputed that the appellant has deposited the Service Tax collected to Government of India. The party plots were sealed by Ahmedabad Municipal Corporation on 17.07.2010. The appellants could not keep up contractual obligation made by them with the recipient of services and hence they refunded the amount along with Service Tax collected from their clients. The appellant had filed a refund claim on 08.06.2011, while they were registered with the Government of India on 31.03.2010.
8. I find that the issue involved in this case will be covered by the provisions of Rule 6(3) of Service Tax Rules, 1994 instead of Section 11B. The provisions of Rule 6(3) of Service Tax Rules, 1994 are reproduced hereunder:-
"x x x"
9. It can be seen from the above reproduced provisions, an assessee may take credit of Service Tax paid by him, he has not provided any service and has refunded the amount to the service recipient along with the Service Tax paid by him. We find that as informed by the ld.Consultant that the appellants have won the case in Hon'ble High Court of Gujarat and sealing of the party plots has been lifted by Hon'ble High Court and they are back in business. On a specific query from the Bench that the appellant will be able to utilize the credit of Service Tax paid, he answered in affirmative. If that be so, I find that there is no time limit indicated in the provisions of Rule 6(3) of Service Tax Rules, 1994 for the appellant to utilize or take credit of excess tax paid by him. In the case in hand, there being no dispute as to the payment of excess Service Tax by the appellant and having refunded to his client, in my view, the appellant can avail the credit of such excess Service Tax paid by him for discharge of Service Tax liability which may arise subsequently having started his business as Mandap Keeper services. To that extent, I find that both the lower authorities are in error in not sanctioning the refund to the appellant.
10. Accordingly, the impugned orders are set aside to the extent these are challenged before me and the lower authorities are directed to give the credit of excess amount of Service Tax paid by the appellant that can be utilized to discharge the Service Tax liability arising out of the services rendered by him, after lifting of sealing of the party plots."
The appeals were allowed.
In passing: Aman & Aakash - the place to Celebrate!
(See 2013-TIOL-516-CESTAT-AHM)
