2013 (1) TMI 575 - AT - Service Tax

Tribunal grants relief, sets aside order, finding entire tax deposit made under protest

SHREE BALAJI ENTERPRISES Versus COMMISSIONER OF CENTRAL EXCISE. MEERUT-I

The Tribunal allowed the appeal, setting aside the order and granting relief to the appellant. It was found that the entire service tax deposit, including ... Service tax paid under protest - Refund of tax paid under protest - Whether the deposit of service tax was under protest or not - Appellant manufacturing country liquor for other – Business auxiliary services - Revenue demand Service Tax - Tax paid under protest – Subsequently there were decisions of various High Courts laying down that such activity is a manufacturing activity and will not attract Service Tax - Appellant claimed refund of service tax paid by them - Held that:- It has to be taken as if the payment for the past period was also under protest. This conclusion is further strengthened from para-5 of the above letter which uses the expression ‘paid under protest’. Admittedly the word ‘paid’ has to refer to service tax which is deposited by the appellant and the only deposit is for the period April, 2008 to June, 2008. As such it can be very clearly concluded that it was the entire deposit which was under protest and the said letter cannot be segregated into two different parts. Issue of limitation would not come into play. Order set aside – In favour of assessee Issues:1. Whether the deposit of service tax was made under protestRs.2. Whether the refund application filed in 2010 was barred by limitationRs.Analysis:1. The appellant started manufacturing country liquor for another entity, not paying service tax initially. Revenue claimed it was liable to service tax under 'business auxiliary services.' Appellant paid service tax for April-June 2008 under protest and later sought a refund based on High Court decisions deeming it a manufacturing activity not subject to service tax. The original authority allowed the refund, but Revenue contended the protest only started from October 2008, making the 2010 refund application time-barred.2. Commissioner (Appeals) upheld Revenue's argument, denying the refund as the protest was deemed to start from October 2008. The central issue was whether the entire service tax deposit, including for April-June 2008, was made under protest. The letter from the appellant to the jurisdictional Superintendent indicated disagreement with Revenue's stance and stated future payments would be made under protest. The Tribunal concluded that the entire deposit, including for the past period, was made under protest, as evident from the language used in the letter.3. The Tribunal found that the appellant's intention to pay under protest encompassed the entire deposit, dismissing the Revenue's argument on limitation. The appeal was allowed, setting aside the order and granting relief to the appellant. The Tribunal emphasized that the protest covered the entire payment, nullifying the limitation contention and disposing of the stay petition and appeal in favor of the appellant.