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2016 (6) TMI 878 - GUJARAT HIGH COURTRecovery of service tax from the FCI where service provider failed to deposit the amount with the service tax department - Deposit of amount u/s 73A collected in the name of Service Tax - Can the Central Government seek direct recovery from FCI with the aid of the section 87 of the Finance Act of 1994? - Case of the petitioner is that cargo service relating to agriculture produce provided by Kailash Enterprise was exempt from payment of service tax, despite which, under mistaken belief, FCI was made to pay service tax of ₹ 5.37 crores which Kailash Enterprise recovered from FCI. However, Kailash Enterprise had not deposited such service tax with the service tax authorities. Held that:- Perusal of this provision would show that the powers vested with the Central Government are in the nature of garnishee enabling Central Government to recover unpaid dues of a person liable to pay the sum to the Government from any other person or requiring any other person from whom money is due or may become due to such defaulting person. The fundamental question is when the Government of India wrote letters to the FCI in the year 2015 and onwards, did FCI was there any due of Kailash Enterprise from FCI ? The answer is obviously in the negative. Section 87 of the Finance Act, 1997 was therefore wrongly invoked. - Decided in favor of petitioner.
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