Refund notification scope extends to education cess and higher education cess collected with service tax under clarificatory circular.

Refund under Notification No. 41/2007-S.T. was interpreted, in light of CBEC Circular No. 134/3/2011-ST, to cover education cess and secondary and higher secondary education cess collected along with service tax. The clarification was treated as extending the refund scope to the cess components, making their exclusion unsustainable. The note records that the refund claim was therefore accepted to that extent and the department's appeals failed.

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Issues: Whether refund under Notification No. 41/2007-S.T. dated 6.10.2007 includes education cess and secondary & higher secondary education cess collected on the service tax.

Analysis: The notification was interpreted in the light of the Board's Circular No. 134/3/2011-ST dated 8.4.2011, which clarified that the refund available under the notification extends to the cess components collected along with service tax. In view of that clarification, the exclusion of these cess amounts was not sustainable.

Conclusion: The refund claim was held to include education cess and secondary & higher secondary education cess, and the department's appeals failed.

Ratio Decidendi: Where the competent Board clarifies the scope of a refund notification, the refund under that notification extends to the cess components collected on service tax when the clarification so provides.

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