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2020 (9) TMI 344 - AT - Service TaxRefund of Advance Service tax paid - refund claimed on the ground that there was absolutely no service provided - Rule 6 (3) of the Service Tax Rules, 1994 - Time Limitation. When advance amount is paid for a service and such service could not be provided due to amalgamation, whether Section 11B ibid. applies when refund of the above amount is claimed? - HELD THAT:- There is no dispute as to the eligibility or otherwise for refund except the claim being rejected as barred by limitation. There is also no dispute that both the service provider and the service recipient having merged into a single entity, there was no service provider or service receiver. Hence, the service for which the agreement was signed could not be provided also since the same would have amounted to providing a service to the self. Further, even Rule 3 of the Point of Taxation Rules, 2011 will have no role since the same would not apply to the case of service to the self. Section 66B of the Finance Act, 1994, which is the charging Section, requires the levy of Service Tax on the value of services other than the services specified in the Negative List, provided or agreed to be provided, by one person to another. Subsequent to the amalgamation in this case, there remained only one person for having provided service to himself/itself. Where an agreed service could not be provided either wholly or partially; that the Rule 6 (3) of the Service Tax Rules, in such a situation, permits the assessee to take credit of such excess Service Tax paid which falls under a separate category by itself, as a deposit and hence, loses the characteristics of “tax”, for which reason provisions of Section 11B ibid. are not attracted. There is also no dispute that even the ST-3 return itself recognizes this aspect by providing a separate column for taking credit without any time-limit and without even any reference to cash or credit, thereby enabling the taxpayer to set off the credit so taken against any tax liability. Unjust Enrichment - HELD THAT:- The Revenue has not alleged unjust enrichment. When the amount loses the character of Service Tax, it could only be treated as a deposit, as held in innumerable precedents, which becomes an item for adjustment in terms of Rule 6 (3) ibid., since no service could ever be provided. Thus, the provisions of Rule 6 (3) would only apply and not the provisions of Section 11B ibid. Appeal allowed - decided in favor of appellant.
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