Service tax cannot be collected twice from a bona fide recipient absent complicity, and refund with interest remains due.

Service tax could not be recovered a second time from an input service recipient where the tax had already been collected from the provider, and the recipient was not shown to have abetted or been complicit in the provider's default. The stated principle is that, under the Act and Rules, no authority exists to demand tax again from the receiver in a bona fide transaction, and Board guidance supported restraint in pursuing recovery from the consignee or receiver. The position was also treated as consistent with Article 265, which bars collection of tax without authority of law. On that basis, the refund was not liable to be denied and the amount deposited was refundable with interest under the rules.

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Issues: Whether refund could be denied where service tax was recovered a second time from the service recipient even though the tax had already been paid to the service provider and the recipient was not shown to be complicit in the provider's default.

Analysis: Under the scheme of the Act and the Rules, there was no authority to collect service tax a second time from the recipient of input service merely because the provider had failed to deposit the tax collected by it. The Board circular relied upon clarified that recovery from the consignee or receiver should not be pursued where the transaction is bona fide. The High Court ruling relied upon also supported the principle that, absent abetment or complicity between the parties, tax cannot be demanded again from the receiver. The demand and retention of the amount were also inconsistent with Article 265 of the Constitution of India, which prohibits collection of tax without authority of law.

Conclusion: The refund could not be denied, and the amount deposited was refundable with interest as per rules.

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