Tribunal grants relief in refund claim for service tax on seismic surveys, citing retrospective amendment impact

The Tribunal overturned the Commissioner's rejection of a refund claim for service tax paid under protest for seismic surveys in offshore areas. The Tribunal found that the retrospective application of the amended notification would be punitive and contrary to the judgment's intent. It also noted the absence of unjust enrichment and supported the appellant's claim, ultimately granting relief by setting aside the impugned order on 9.10.2014.

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Issues:
Appeal against rejection of refund claim under Section 11B of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994 for service tax paid under protest for seismic surveys in offshore areas.

Analysis:
1. The appellants, a French company, conducted seismic surveys for ONGC in offshore India. They contended that service tax was not applicable as the survey sites were not in designated areas until 2009. The Commissioner held the substitution in notification No. 21/2009 had retrospective effect, citing the Supreme Court's decision in Government of India Vs. India Tobacco Association. Unjust enrichment and payment under protest were rejected.

2. The appellant's counsel argued that the survey sites were outside designated areas for service tax as per notifications. They emphasized the limited sovereign rights of India in the continental shelf and EEZ. The counsel also clarified that import of services did not apply during the disputed period before 18.4.2006.

3. The AR did not dispute the offshore site locations but relied on the Indian Tobacco Association case, claiming retrospective effect of notification substitution. The Tribunal noted the service tax levy's scope in designated areas under notification No. 1/2002-ST until 2009 when it was extended to the survey sites.

4. The Tribunal analyzed the Indian Tobacco Association case, emphasizing its application to beneficial statutes. It disagreed with the Commissioner's order, stating that applying the amended notification retrospectively would be punitive, contrary to the judgment's intent. The Tribunal also addressed the import of services argument and the Commissioner's inconsistent reasoning on territorial waters.

5. The Commissioner's denial of the refund claim based on finality of assessment was challenged. The Tribunal found no assessment order, indicating the payment under protest challenged the assessment. Citing relevant case laws, the Tribunal supported the appellant's claim, noting the absence of unjust enrichment and the submission of necessary certificates.

6. The impugned order was set aside, granting relief to the appellants. The Tribunal's decision was pronounced on 9.10.2014, overturning the Commissioner's rejection of the refund claim for service tax paid under protest for seismic surveys in offshore areas.

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