Exemption option under service tax notification cannot be withdrawn mid-year; refund claim fails for non-compliance with the condition.

Where a taxable service provider opts under Notification No. 6/2005-S.T. to forgo the exemption and pay service tax, that election cannot be withdrawn during the same financial year. Service tax paid for the first half of the year remained payable, and a later surrender of registration did not undo the earlier option or satisfy the notification's condition. The refund claim was therefore not maintainable because the assessee had not complied with the exemption condition attached to the option exercised.

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Issues: Whether the appellant was entitled to refund of service tax paid after having exercised the option under Notification No. 6/2005-S.T. and later sought to withdraw from that option within the same financial year.

Analysis: The notification allowed a provider of taxable service the option not to avail the exemption and pay service tax, but once such option was exercised in a financial year, it could not be withdrawn during the remaining part of that financial year. The appellant had paid service tax for the first half of the year and later sought refund after surrendering registration in the second half, which was contrary to the condition attached to the exemption.

Conclusion: The refund claim was not maintainable, as the appellant failed to satisfy the condition of the exemption notification.

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