Refund Can't Be Rejected On Grounds Of Classification Once Tax Liability Is Settled: CESTAT

The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that refund cannot be rejected on grounds of classification once tax liability is settled. Dr. Rachna Gupta (Judicial Member) and R. Priya (Technical Member) stated that refund under Section 11B of Central Excise Act read with Section 83 of the Finance Act, 1994, is permissible subject to two conditions: - the claim should have been raised before one year from the relevant date; and the claimant has not passed on the incidence of such duty and interest to any other persons. In this case, the Delhi International Airport Limited (DIAL) had leased the Delhi Airport under Airport Authority of India agreement. DIAL granted the license to the assessee/Airport Retail Pvt. Ltd to run duty free shops in the designated areas of Delhi International Airport premises, against fixed monthly license fee, gross revenue share subject to minimum annual guarantee in USD. DIAL started collecting service tax from the assessee. The assessee filed a writ petition where the Delhi High Court stated that the license agreement was not taxable as airport services since it amounted to renting of immovable property. The court gave liberty to the assessee to seek refund of the service tax paid. Two show cause notices were issued to the assessee. The assessee filed a refund claim before the Adjudicating Authority. The Adjudicating Authority rejected the refund claim. Aggrieved by the decision of Adjudicating Authority, the assessee filed an Appeal before Commissioner (Appeals) whereby it upheld the order of the Adjudicating Authority. The assessee has challenged the order passed by the Commissioner (Appeals) before the Tribunal The assessee contended that the if the transaction between DIAL and the assessee is considered as a simple letting out of immovable property, it would not fall within the taxable service of airport service. The Tribunal found that DIAL had confirmed that the service tax collected from the assessee had been deposited with the Department, indicating that the burden had not been passed on. The Tribunal observed that both the requisite conditions of sanctioning a refund claim under Section 11B of Central excise Act was fulfilled by the assessee. Also, the refund claim was filed under the liberty granted by the Delhi High Court, which had already held that the assessee had no tax liability for the relevant period. The Tribunal stated that rejecting the refund claim on the ground of failure to fulfil legal aspect of classification is not sustainable. In view of the above, the Tribunal allowed the appeal and sanctioned the refund claim. Counsel for Appellant/ Assessee: Anand Sukumaran Counsel for Respondent/ Department: S.K. Meena Case Title: M/s Airport Retail Private Limited Versus Commissioner of Service Tax, Gurgaon-II Case Number: Service Tax Appeal No. 51677 OF 2017 Click Here To Read/Download The Order

Refund Can't Be Rejected On Grounds Of Classification Once Tax Liability Is Settled: CESTAT

Mehak Dhiman

Tags