TMI Blog2017 (5) TMI 1199X X X X Extracts X X X X X X X X Extracts X X X X ..... fter raising a dispute, the department cannot unilaterally determine that the amount is due and retain the same. The amount paid thus becomes an amount paid by mistake. The appellants are therefore eligible for refund. Appeal allowed - decided in favor of appellant. - ST/21857/2014 - Final Order No. A/30541/2017 - Dated:- 4-4-2017 - Ms. Sulekha Beevi, C.S., Member (Judicial) Sh. S. Thirumalai, Advocate for the Appellant. Sh. Arun Kumar, Deputy Commissioner (AR) for the Respondent ORDER The appellant is a company registered under the Companies Act, 1956 with an object of promoting and representing industry or trade/commerce or any useful object of public purpose. They are also registered under Section 12 of Income Tax Act, 1961 as a charitable institution as well as registered under the category of 'Club or Association Service' and 'Mandap Keeper Service' with the department. The appellants initially paid service tax on membership fee collected from members during the period June 2005 to September 2005 under the category of Club or Association Service. They were also collecting fees for issuing 'Country of Origin' certificate t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Board had collected the service tax on the fees collected for issuing such certificates for the subsequent period, i.e. from April, 2008 onwards under the category of Club and Membership Services and therefore the services cannot be considered as under Technical Inspection and Certification Agency service. In response to this, the department issued a further letter dated 05.07.2013 directing the appellant to pay service tax of ₹ 9,96,698/- being the service tax under the category 'Technical Inspection and Certification Agency Service' for issuance of Country of Origin certificates for the period 2006-07 to 2007-08 along with interest and penalty. 4. The appellants paid the amount and vide their letter dated 01.08.2013 informed the department that they have paid the service tax to the tune of ₹ 9,96,698/- for the period 2006-07 and 2007-08 under protest without prejudice to their rights to contest the taxability of the services. In the said letter they had submitted their contentions in detail on the said issue. The appellants had also stated that in case further proceedings are initiated they should be issued a notice and reasonable opportunity to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion. Further that when the appellant has paid the amount under protest, it is incumbent upon the department to issue a show cause notice and determine the liability. Instead, the department has unilaterally decided that the payment is made by appellant accepting the liability. The appellant has thus been deprived of a chance to contest the demand raised for the period 2006-07 to 2007-08. He submitted that therefore there is no determination of service tax for the said period. The appellant filed refund claim of the amount of FRS. 9,96,698/- paid by them under protest, as there was no determination of service tax though appellant disputed the liability. The activity of issuing Country of Origin certificate during the period not being taxable activity, and as there is no determination of service tax by the department by initiating proceedings under Section 73 of Finance Act, the appellant is eligible for refund of service tax paid under mistake. 8. To canvass the argument that the services of issuing of Country of Origin certificate to its members is not a taxable service during the period 2006-07, the Ld. Counsel relied upon the judgment in the case of The Cricket Club of Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h regard to the refund of ₹ 9,96,698/- paid by the appellant for the period 2006-07 to 2007-08 pursuant to repeated letters issued by the department that the service of issuing Country of Origin certificates is taxable under the category of Technical Inspection and Certification Agency Service. Undisputedly, the appellants have paid the amount marking their protest. It is the contention of the department that there is no provision in the Finance Act, 1994 or allied Rules to pay service tax under protest and therefore the same has to be considered as admission of liability. It is also argued by the Ld. AR that if aggrieved, the appellant ought to have filed appeal against the letter dated 19.08.2013 issued by department informing that it is treated as acceptance of liability. Let me first address this argument put forward by the department. Section 35 (1) of Central Excise Act, 1994 provides for filing appeals before Commissioner (Appeals). This section states that any person aggrieved by any decision or order passed under this Act by a Central Excise officer may appeal to the Commissioner (Appeals). The words used are 'decision' or 'order'. In many judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... department that the amount has been paid under protest and also that they are proceeding to file a refund claim. Even after filing a refund claim the department has issued only a deficiency memo. 12. Although department was put to notice about the dispute they have remained silent without initiating any proceedings for recovery. Section 73 makes clear the situation for issuance of show cause notice. When the amount is short paid, short levied or not levied, gives rise to the need for issuance of show cause notice and determination of the amount of tax due. Sub-section (3) of Section 73 states that if assessee accepts the amount pointed out by officer and pays the amount, then no show cause notice need be issued; which means there is no necessity for determination of the amount of tax due. This can only mean that when assessee pays the amount as pointed out by department and disputes the liability, the same has to be adjudicated and determined by initiation of proceedings. Such payment cannot be considered as acceptance of liability. The machinery for determination of amount due under Section 73 of the Act (ibid) extends to situation where the assessee makes payment as point ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t only that the petitioner would be liable to pay tax but will also be liable to pay interest in accordance with the Section 75 and also penalty if a case for levy of penalty is made out. However, on one hand, the respondents are not even taking decision on the return filed by the petitioner as provided under Section 72 and also not taking action under Section 73 on the pretext that the payment is already made and on the other hand, now when the petitioner has made the payment under protest, the provisions of Section 87 are not now sought to be invoked on the ground that the tax liability is determined. 43. We are of the considered view that the amount which is payable by a person can be said to be payable only after, there is determination as provided under Section 72 or Section 73 of the said Act. We find that neither of that has been done. 44 . In so far as the contention of Shri Pradeep Jetley that the petitioners have not filed an application for refund under Section 11B of the Central Excise Act, which by virtue of Section 83 will have to be read as a part of the said Act, is concerned, again we are at pains to say that the said contention at least at the behest of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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