TaxTMI 
TaxTMI 
2016 (11) TMI 1291
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....their agents, proceeded on the premise that such reimbursements were collection of tax in excess that, under section 73A of Finance Act, 1994, is required to be credited to the Central Government. The impugned order held that Rs. 93,83,99,657/- reimbursed by agents of the appellant towards the service tax liability that devolved on the appellant between April 2006 and September 2013 was to be recovered. 2. The adjudicating authority, Commissioner of Central Excise Mumbai - II, notes that non-corporate agents of the appellant were, under agreement, compelled to remit 60.3 % of the tax liability on agents commission to the appellant and that the notice for recovery has invoked section 73A92) of Finance Act, 1994. Impugned order-in-original no. 5/ST/RN/Commr/M-II/14-15 dated 30th January 2015 draws upon the specific insertion in section 73A of Finance Act, 1994 that does not find expression in the pari materia section 11D of Central Excise Act, 1944, the definition of 'person liable to pay tax' in rule 2(1)(d)(iii) of Service Tax Rules, 1994 when 'insurance auxiliary services' are rendered, rule 4A of Service Tax Rules, 1994 which prescribes inclusion of the tax amount, rule 3(1) of....
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....instead of paying the service tax from his own pocket has recover4ed a part of the amount from the provider of service representing as service tax. Therefore, he is required to deposit the same to the government in terms of section 73 A (2) of the Finance Act, 1944. The case law cited by the assessee pertaining to Section 11D of the Central Excise Act are not applicable to the case in hand as there is no provision in Section 11D of Central Excise Act equivalent to Section 73A(2) of Finance Act, 1994... ...' The findings supra by the adjudicating authority appear to stem from the provisions cited in the impugned order. 3. One of the foundations of the finding is that section 73A(2) of Finance Act is a unique and unparalleled provision that does not admit to the binding precedent of decisions rendered in disputes arising from implementation of section 11D of Central Excise Act, 1944. Yet, in defence of the impugned order, Mr VK Singh, Special Counsel appearing for the respondent-Commissioner, relies upon the decisions of the Tribunal in Vimal Moulders (I) Ltd v. Commissioner of Central Excise, New Delhi [2004 (164) ELT 302 (Tri-Del)], Katralla Products Pvt Ltd v Commissioner of Ce....
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.... observation of the adjudicating Commissioner that a parallel provision is not found in section 11D of the Central Excise Act, 1944. Considering the peculiarity of service tax as a destination-based tax with taxability as the determinant of status as assessee, situations of providers of non-taxable services, in ignorance or otherwise, collecting tax from recipients of service is not a possibility that can be ruled out. Such a possibility is remote in a transaction in goods. With the appellant being an assessee or person liable to pay service tax, excess collection, if any, is recoverable by invoking section 73A (1) of Finance Act, 1994. 6. That being so, the decisions cited by Mr VK Singh may not be entirely without relevance in determining the extent to which section 73A of Finance Act, 1994 can be resorted to by tax authorities. We note that the cited decisions address the issue of duties having been collected in excess of that deposited in the credit of Central Government by the manufacturing entities in each of these cases. We are not entirely sure if the facts in the dispute before us is one of collection of tax in excess of that deposited to the credit of the Central G....
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....e than the duty due according to law, the whole amount collected as duty has to be paid over to the State; if on the assessment being made it is found that the duty collected and paid over by the manufacturer is more than the duty due according to law, such surplus amount shall either be credited to the Fund or be paid over to the person who has borne the incidence of such amount in accordance with the provisions of Section 11B. It is obvious that if in a given case, the manufacturer has collected less amount as representing the duty of excise than what is due according to law, he is not relieved of the obligation to pay the full duty according to law. This is the general purport and meaning of Section 11D. These may be case where goods are removed/cleared without effecting their sale. In such a case, Section 11D is not attracted. It is attracted only when goods are sold. The purport of this section is in accord with Section 11B and cannot be faulted." xxxxxxxx 133 ... ... Section 11D requires clarification. Excise duty is, ordinarily paid or payable at the time of clearance of the goods. The sale of the goods may be later. So, if excise duty due is already paid by the manu....
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....16th May 2008 which clarifies that section 11D of Central Excise Act, 1944 is not liable to be invoked even if the mandated payment for availing CENVAT credit on inputs used in exempt goods is recovered from the buyers of the output goods. That this ratio applies to service tax levy and that recovery of amount already paid would be tantamount to double deposit is enunciated by the Tribunal in Sangam India Ltd v. Commissioner of Central Excise, Jaipur-II [2012 (28) STR 627 (Tri-Del)]. 10. In Rashtriya Ispat Nigam Ltd v. Dewn Chand Ram Saran [2012-TIOL-37-SC-ST], the Hon'ble Supreme Court was called upon to decide whether the principal who was, by law, designated as 'assessee' under section 65 of Finance Act, 1994 could, in enforcing contractual obligations, be allowed to recover the service tax dues paid by it for the services rendered by a contractor and it was held that: '26. As far as the submission of shifting of tax liability is concerned, as observed in paragraph 9 of Laghu Udyog Bharati (supra), service tax is an indirect tax, and it is possible that it may be passed on. Therefore, an assessee can certainly enter into a contract to shift its liability of service tax. Though....