2008 (10) TMI 47 - HC - Service Tax

Appeal allowed; dismissal quashed for lack of appealable order, matter remitted for fresh refund reconsideration by Commissioner

HC allowed the taxpayer's appeal, holding that the Tribunal's dismissal-based on the absence of a challenged assessment order-was unsustainable because no ... Refund of service tax paid in excess - insufficient evidence to justify the claim - credit/debit notes issued to clients/sister concerns - Tribunal dismissed the appeal by adopting yet different reasoning, viz. that since the assessee had not challenged the assessment order, the claim of refund cannot be entertained, so as to indirectly challenge the assessment order, without filing statutory appeal, against the assessment order. HELD THAT:- Admittedly, the appeal under Section 85 lies against a specific order of the concerned authority in Form ST-4, which requires to disclose, designation and address of the officer passing the decision or order appealed against, and the date of decision or order, so also the date of communication of the decision or order appealed against to the appellant. Admittedly, when no order capable of being appealed against, had ever been passed, it cannot be said that the assessee could file appeal against the assessment order, and not having so filed appeal he cannot lay the claim of refund. Thus, the order of the Tribunal cannot sustain. Then remains the order Annex.1, which proceeds on the basis, as quoted above, while according to the learned counsel for the appellant, all relevant and necessary documents had been shown in original, and photostat copies were produced on record, but they have not been looked into. In that view of the matter, the question as framed is required to be answered against the Revenue, and in favour of the assessee, but at the same time, the relief which we are inclined to grant is, only to the effect, that while setting aside the orders Annex.2 and 3, we remit the matter back to the Commissioner. Appeal is accordingly allowed. Issues:Challenge to impugned orders of the Tribunal and authorities below regarding the claim to refund of service tax paid in excess.Analysis:The appellant filed an appeal challenging the Tribunal's orders and authorities' decisions regarding the refund of service tax paid in excess. The appellant voluntarily deposited amounts as service tax on services charged from sister concerns/clients, later realizing they were not taxable. The claim for refund was based on credit notes issued for the entire amounts. However, the Assistant Commissioner rejected the refund claim, stating insufficient evidence to justify the claim. The appellant failed to provide complete details and evidence supporting the refund claim, leading to rejection based on inability to verify the claimed amount accurately. The Assistant Commissioner also noted that the burden of tax had been passed on to clients, making the refund claim invalid.The Commissioner dismissed the appeal, considering the services taxable under 'Manpower Recruitment Agency' and 'Security Services,' falling under the definition of 'Management Consultant.' The appellant contended that all necessary documents were submitted to the Assessing Officer. Subsequently, the Tribunal dismissed the appeal, citing the absence of a challenge to the assessment order as a reason for rejecting the refund claim indirectly challenging the assessment order without filing a statutory appeal.Upon review, the High Court observed that the Tribunal's reasoning lacked a legal basis as the appeal under Section 85 is against a specific order, which was not applicable in this case. The Court highlighted the absence of an appealable order against which the appellant could file an appeal, rendering the Tribunal's decision unsustainable. Additionally, the Court noted a previous order by the Commissioner in favor of the appellant, further undermining the Commissioner's reasoning for dismissal.In conclusion, the High Court allowed the appeal, setting aside the Tribunal and Commissioner's orders. The matter was remanded to the Commissioner (Appeals-II) for a fresh adjudication considering the law and previous orders favoring the appellant. The Commissioner was directed to expedite the decision-making process, ensuring a fair assessment of the refund claim based on the observations made.