- (1.) HEARD learned counsel for the parties.
(2.) THE learned Custom, Excise and Service Tax, Appellate Tribunal, East Zone Bench, Kolkata was directed to send the statement of case in terms of Section 35 H(3) of the Central Excise Act, 1944 by the order of this Court upon which following questions of law have been referred to this Court : - 1(i). Whether the Tribunal was justified in law confirming the recovery of the refund from the applicant who, being the transport operator, (Service Provider) admittedly is not liable to pay any service tax whereas TISCO, being the person who availed the services of the transport operator, is liable for payment of service tax under law? (ii) Whether on the facts and in the circumstances of the case, the Tribunal was justified in law holding the refund to be recovered from the applicant and not from TISCO, especially in view of the fact that the applicant is not an assessee under the Act and TISCO is the assessee? 2 Whether Section 117 of the Finance Act, 2000 had any application to the case of the applicant and whether it was liable to pay interest @ 24% per annum in terms thereof ? Whether and in any event, any interest could be demanded from the applicant for the period prior to the setting aside of the refund order dated January 3, 2000 by the Commissioner in exercise of his powers under Section 84 of the Finance Act, 1994 by an order dated November 29, 2001 communicated to the applicant on December 28, 2001? 3 Brief facts of the case are that by Finance Act, 1997, service tax was imposed at the rate of 5% on various persons including Goods Transport Operators who were service providers and such tax was also recoverable by the transport service receivers. Then vide notification No. 42/97 dated 05.11.1997 the liability to pay the tax was restricted on the user of the services of the Goods Transport Operators instead of providers of the said service. The validity of Rule 2 of the Service Tax Rules as amended in 1997 was challenged before the Hon'ble Supreme Court and the Hon'ble Supreme Court in the case of Laghu Udyog Bharati & Others Vs. Union of India reported in 1999(112) ELT -365 -SC quashed the provisions of Rule 2(i)(d)(xii) and XVII of the Service Tax Rules, 1997 . Before this judgement came, the TISCO - service availer, who availed the services of the Transport Operator (applicant) of providing the transport vehicles, paid the service tax amount to the Revenue pertaining to period 16.11.1997 to 01.06.1998. In view of the judgement of the Hon'ble Supreme Court delivered in the case of Laghu Udyog Bharati & Others (supra), quashing the tax liability with the consent of TISCO, an application was submitted by the applicant (Transport Operator) for refund of the tax deposited by TISCO in view of the order of the Hon'ble Supreme Court which is as under : - "................ any tax which has been paid by customers or clients of the clearing and forwarding agents or of the goods transport operators shall be refunded within twelve weeks on their making a demand for refund." The Revenue, finding above direction of the Supreme Court, refunded the tax amount deposited by TISCO to the applicant.
(3.) HOWEVER , applicant's own case is that it did not pay the tax and tax amount was paid by TISCO (the service availer). Since the tax was not paid by the applicant, therefore, it could not have been refunded to the applicant, therefore, applicant obtained a consent letter from the service availer M/s. TISCO and because of that reason the tax deposited by TISCO, was paid to the applicant. Applicant also submitted an affidavit before revenue authority on 29.12.1999 and gave undertaking that amount refunded to the applicant shall be paid back to the Department in case the refund is found to be erroneous. It appears from the order of the CEGAT dated 14.01.2003 that TISCO might have filed an application for refund of said tax amount but learned counsel for the TISCO Sri M.S. Mittal submitted that this observation of the Tribunal is erroneous as TISCO did not file the application. This contention of TISCO is seriously contested by the applicant's counsel Sri Binod Poddar and submitted that TISCO submitted the application for refund. This fact may not be very much relevant for the purpose of deciding the question referred to us as undisputedly, the tax amount was paid by the TISCO, the service availer and it was refunded to the applicant (service provider), with consent and authorisation given by the TISCO in favour of the applicant.;