When service tax paid by the assessee but considered as not payable and treat as deposit should be refunded accordingly In the case of Roshan R Jaiswal (Appellant) Vs. Commissioner of Central Excise, Nagpur [2014-TIOL-2308-CESTAT-MUM] The Appellant is a distributor for Bharat sanchar nigam limited Prepaid mobile sim services etc., and also registered with Service Tax Department under the”Franchise service”.
Pursuant to issue of Show Cause Notice on 16.10.2008, which was adjudicated vide Order-in-Original on 17.08.2009 , the Appellant deposited an amount of Rs.24,73,590/- during the period from 13.01.2009 to 09.11.2009 which also includes interest . instead of depositing the tax with interest the Appellant preferred an appeal before the Commissioner (Appeals), who vide an Order 15.02.2010(the Appellate Order) allowed the appeal in favour of the appellant argued that he is a trader of SIM cards and have paid the Sales Tax on such transaction and accordingly, no Service tax is payable. after allowing of the appeal, the Appellant applied for refund of the total amount of Rupees 2473590/-.But the Assistant Commissioner while adjudicating the claim of refund, allowed refund of only Ruppes 2376070/- (Rs.18,98,953/- as Service tax & Rs.4,77,117/-as interest)
The amount of Service tax on the mentioned value comes to Rupees 1898953/- and interest on such tax Rupees 574637/- whereas on scrutiny of the challans
The Appellant had received Rupees 1996473/- as tax and Rupees 477117/- as interest.
The amount of Rupees 97520/- was rejected just because of mismatched that the interest paid by the Appellant does not tally with the calculation as per the Appellate Order.
Therefore the Appellant filed an appeal before the Commissioner (Appeals), and he dismissed the appeal by treating as the case of time bar. and the Appellant preferred an appeal to the Central excise and service tax tribunal.
It was held by the CESTAT, Mumbai that the amounts deposited by the Appellant whether by way of tax or interest, assumes the character of deposit when it was held in its favour that no Service tax is payable and/ or exigibleand therefore, the entire amount is liable to be refunded.
Accordingly, the Adjudicating Authority was instructed to refund of Rupees 97520/- to the Appellant within a period of four weeks.