TaxTMI 
TaxTMI 
2026 (8) TMI 792
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....recovery of interest and imposed penalties. There is no appeal before us on that part of the demand proposed in the SCN which has not been confirmed by the Commissioner. Thus, the issue attained finality to that extent. 2. During the course of investigation itself, the appellant had deposited certain amount which was partly appropriated by the Commissioner in the first impugned order dated 28.10.2020 referred to above. The appellant filed a refund claim for Rs. 1,29,04,999/- being the amount which was deposited during the investigation itself but which was not appropriated. This application for refund was rejected by the Assistant Commissioner and on appeal, the Commissioner (Appeals) passed order dated 20.2.2023 upholding the rejection of refund. This order of the Commissioner (Appeals) is assailed in Service Tax Appeal 54668 of 2023 by the appellant. 3. We have heard learned counsel for the appellant and learned authorised representative for the Revenue and perused the records. We proceed to examine the Service Tax Appeal 50326 of 2021 first. 4. On merits, there are three points of dispute in this demand: a. Demand of service tax on activity which, admittedly, a....
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...., they were deposited. Section 73A reads as follows: 73A. Service Tax collected from any person to be deposited with Central Government:- (1) Any person who is liable to pay service tax under the provisions of this Chapter or the rules made thereunder, and has collected any amount in excess of the service tax assessed or determined and paid on any taxable service under the provisions of this Chapter or the rules made there under from the recipient of taxable service in any manner as representing service tax, shall forthwith pay the amount so collected to the credit of the Central Government. (2) Where any person who has collected any amount, which is not required to be collected, from any other person, in any manner as representing service tax, such person shall forthwith pay the amount so collected to the credit of the Central Government. (3) Where any amount is required to be paid to the credit of the Central Government under sub-section (1) or subsection (2) and the same has not been so paid, the Central Excise Officer shall serve, on the person liable to pay such amount, a notice requiring him to show cause why the said amount, as specified i....
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.... -essentially, wrongly collected. Section 73 does not give the power to the officers to demand that more amounts should be so wrongly collected and deposited in the account of the Central Government. 10. The demand of service tax on the activity of manufacture undertaken by the appellant for M/s. Sandhar Automach, therefore, deserves to be set aside and is set aside. Demand of service tax on reimbursable expenses received by the appellant from its clients upto 13.5.2015 11. As discussed above, to some clients, the appellant provided manpower during the period up to 13.5.2015 and charged from them the actual wages, PF, ESI, etc and a service charge of 5% to 10%. The demand of disputed service tax is in respect of the reimbursable expenses. 12. In paragraph 27.1, the Commissioner noted that as per the judgment of the Supreme Court in Union of India versus Intercontinental Consultants and Technocrats Ltd., no service tax could be charged on reimbursable expenses. However, observing that in the invoices raised in 2013-2014 and 20142015, the appellant had, after self-assessment, paid service tax including the reimbursable expenses, he declined to follow the judgment of the S....
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....nter-continental Consultants and Technocrats. Adjustment of service tax paid but not reflected in the ST-3 returns for the period June to August 2014 16. It is the submission of the appellant that an amount of Rs. 10,36,367/- which was paid by the appellant was not reflected in the ST-3 Return for the period June to August 2014 and that it had requested the Commissioner to adjust this amount in the demand but there is no finding in the impugned order on this issue. 17. Since this is a matter of fact to be verified, this question needs to be remanded to the Commissioner to verify and recalculate as appropriate. Adjustment of excess service tax of Rs. 10,14,332/- paid by the appellant during April 2017 to June 2017 18. According to the learned counsel for the appellant, it had deposited excess amount of Rs. 10,14,332/- as service tax during April to June 2017 which needs to be adjusted but which was not adjusted in the impugned order against the confirmed demand. 19. Since this is a matter of fact to be verified, this question needs to be remanded to the Commissioner to verify and recalculate as appropriate. Appropriation of an amount of Rs. 1,38,00,000/-deposite....
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....at needs to be seen if the proceedings could have extended beyond the five year period. The short answer is NO. 26. In this factual matrix, the appropriation of an amount deposited by the appellant deserves to be set aside. Other submissions 27. Learned counsel for the appellant also contested the invocation of extended period of limitation and imposition of penalties. 28. Since we have decided in favour of the appellant on merits on both the issues viz., activity amounting to manufacture being taxed as supply of manpower and on the inclusion of reimbursable expenses in the value of taxable services before 1.4.2015, we find it unnecessary to examine the question of limitation and the penalties imposed consequent upon the confirmation of the demand. Appeal No. ST/54668/2023 assailing rejection of refund 29. In this appeal, the appellant assailed the order of the Commissioner (Appeals) dated 23.1.2023 upholding the order of the Assistant Commissioner dated 30.6.2022 rejecting refund of Rs. 1,29,04,999/- to the appellant. 30. The application was for refund of Rs. 1,29,04,999/- (of Rs. 1,38,00,000/- for the period April 2014 to Sept 2014) deposited during investiga....