2008 (5) TMI 100 - AT - Service Tax

Tribunal upholds bank's appeal on Service Tax refund claim, emphasizes need for early resolution

The Tribunal upheld the Commissioner (A)'s decision, allowing the respondent-bank's appeal regarding the refund claim for excess Service Tax paid under ... Eligibility to claim refund of excess Service Tax paid - levy of Service Tax under the head of “Banking and Other Financial Services” - Commissioner (A) has set aside the OIO and allowed the appeal of the respondent-bank for refund – since commissioner examined various evidences and certificates produced to find out that the plea of refund is justified, stay application by revenue is rejected Issues involved:Levy of Service Tax under 'Banking and Other Financial Services', eligibility of refund claim of excess Service Tax paid, applicability of previous judgments, distinction of judgment by the Chartered Accountant, agreement to not insist on refund till disposal of appeal, request for early hearing.Analysis:The judgment revolves around the issue of Service Tax levy under 'Banking and Other Financial Services' and the eligibility of a refund claim for excess Service Tax paid. The Commissioner (A) set aside the Order-in-Original and allowed the appeal of the respondent-bank, leading to the Revenue's grievance. The main contention was whether the refund claim was maintainable without modification of the assessment order, citing the judgment in M/s. Priya Blue Industries Ltd. v. CCE. The Chartered Accountant argued that the refund claim was justified, referencing the Karnataka High Court's judgment and previous Tribunal decisions. Both parties agreed to not pursue the refund amount until the appeal's disposal, with a request for an early hearing due to the significant amount involved.The Tribunal carefully considered the submissions and found that the Commissioner (A) had extensively examined the issue, relying on previous judgments like Prachar Communications Ltd. and CCE v. Standard Chartered Bank to support the refund claim's validity. The Tribunal did not identify any errors warranting intervention and refused to grant a stay on the Commissioner's order. The Chartered Accountant, in consultation with the bank's Sr. Manager, agreed to postpone the refund claim's insistence until the appeal's resolution, seeking an early hearing instead. The Tribunal rejected the stay application but accepted the alternate prayer for early hearing, scheduling the final hearing for a specific date due to the substantial amount involved.In conclusion, the judgment addressed the Service Tax levy issue, the eligibility of a refund claim, the applicability of previous judgments, and the agreement to defer the refund claim's pursuit until the appeal's conclusion. The Tribunal emphasized the thorough examination conducted by the Commissioner (A) and the reliance on relevant legal precedents to support the validity of the refund claim. The decision highlighted the importance of early hearing due to the significant amount at stake, ensuring a prompt resolution of the appeal.