Court allows appeal, finds MIDC exempt from service tax, upholds refund claim under Notification No. 25/2012.

Bhausaheb Baburao Ghuge Versus Commissioner of GST & Central Excise Aurangabad

Bhausaheb Baburao Ghuge Versus Commissioner of GST & Central Excise Aurangabad - 2019 (22) G. S. T. L. 424 (Tri. - Mumbai) Issues:
Refund claim for an amount paid by mistake. Interpretation of Notifications No. 35/2012-ST and 6/2014-ST. Applicability of service tax on services provided to Maharashtra Industrial Development Corporation (MIDC). Ruling on MIDC being a statutory body. Exemption under Notification No. 25/2012 for services provided to government authorities.

Analysis:
The appeal in question pertains to a refund claim filed by the appellant for an amount paid by mistake. The appellant contended that the amount was paid in excess and sought a refund based on Notifications No. 35/2012-ST and 6/2014-ST, which exempted the services rendered by them for garbage collection in the MIDC. The adjudicating authority initially accepted the refund claim, but the revenue challenged this decision before the first appellate authority, citing a Tribunal's stay order in the case of MIDC v. Commissioner of Service Tax, Mumbai-I. The first appellate authority reversed the decision, denying the refund to the appellant, leading to the current appeal.

A crucial aspect of the case involved the taxability of services provided to MIDC. The Tribunal had previously ruled in appeal Nos. ST/650/2011 and others that MIDC, being a statutory body under the Maharashtra Industrial Development Act, 1961, was not liable to pay service tax. This judgment was further upheld by the Hon'ble High Court of Bombay, solidifying the legal position that MIDC is indeed a statutory body exempt from service tax liabilities.

In analyzing the exemption under Notification No. 25/2012 dated 20/06/2012, which grants exemption for services provided to government authorities in sanitation and waste management, the bench found that the appellant had indeed provided services to MIDC for garbage collection and disposal. Consequently, the adjudicating authority's decision to allow the refund claim was deemed correct.

Therefore, considering the settled legal position regarding MIDC's status as a statutory body and the specific exemption under Notification No. 25/2012, the impugned order denying the refund was set aside. The adjudication order was reinstated, directing the revenue to refund the amount in question as per the initial decision of the adjudicating authority. Ultimately, the appeal was allowed in favor of the appellant.