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2013 (2) TMI 135 - HC - Service Tax


Issues Involved:
1. Whether the Tribunal was justified in confirming the recovery of the refund from the applicant, a transport operator, instead of TISCO, who was liable for the service tax.
2. Applicability of Section 117 of the Finance Act, 2000 to the applicant and liability to pay interest at 24% per annum.
3. Demand of interest from the applicant for the period prior to the setting aside of the refund order by the Commissioner.

Detailed Analysis:

Issue 1: Recovery of Refund from the Applicant
The Tribunal confirmed the recovery of the refund from the applicant, a transport operator, instead of TISCO, who was liable for the service tax. The applicant argued that they were not liable to pay any service tax and that the tax was paid by TISCO, the service availer. The applicant received the refund with TISCO's consent. The validating Act, Finance Act, 2000, nullified the Supreme Court's judgment in Laghu Udyog Bharati & Others, which had quashed the tax liability. The Tribunal was justified in ordering the recovery from the applicant, who received the refund erroneously.

Issue 2: Applicability of Section 117 of the Finance Act, 2000
Section 117 of the Finance Act, 2000, imposed a duty to refund any tax refunded due to a court judgment that was later nullified. The applicant argued that they were not liable under the Finance Act, 1997 or 2000. However, the Tribunal held that the applicant, having received the refund, was liable to return it along with interest. The Tribunal's decision was supported by the statutory provision under Section 117, which created a liability independent of the applicant's status as an assessee.

Issue 3: Demand of Interest for the Period Prior to Setting Aside the Refund Order
The Tribunal held that the liability to pay interest at 24% per annum under Section 117 was clear and statutory. The interest was payable from the date the Finance Act, 2000, received the President's assent. The Tribunal justified the demand for interest from the applicant, who received the refund erroneously. The applicant's argument that the interest could not be demanded for the period prior to the setting aside of the refund order was rejected.

Conclusion:
The Tribunal's decision to recover the refund from the applicant was justified. The applicant, who received the refund with TISCO's consent, was liable to return it along with interest under Section 117 of the Finance Act, 2000. The demand for interest was statutory and independent of the applicant's status as an assessee. The Tribunal's findings were upheld, and all questions were answered against the applicant.

 

 

 

 

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