2012 (28) STR 391 (Tri.-Mumbai) Skoda Auto India Pvt. Ltd. vs. Commissioner of C. Ex., Aurangabad

Facts:

The appellants, a manufacturer of motor vehicles also rendered technical assistance, training with respect to supply, assembly, manufacture, testing and quality assurance of products and to use their trademark, to Skoda Auto A. S. The appellants paid service tax with interest during the pendency of SCN. In view of decision of Indian National Ship Owners Association vs. Union of India 2009 (13) STR 235 (Bom.), the appellants filed refund claim of interest for delayed payment of Service tax paid in pursuance of the SCN. The authorities rejected the refund claim on the grounds of limitation and that the order-in-original was not challenged. However, the appellants contested that the issue was well settled in view of judgment of Indian National Ship Owners Association (Supra) which was confirmed by the Supreme Court that import of services were not taxable prior to 18/04/2006 and therefore they were eligible for refund of service tax with interest from 11/12/2008 when the Hon’ble High Court decided the issue. Further, since the appellants took CENVAT credit of service tax paid, the refund claim was with respect to interest paid which was filed within 1 year from the date of decision of the Hon’ble High Court.

Held:

The appellants paid service tax with interest in the year 2006 which was appropriated by way of adjudication and the appellants took CENVAT Credit of Service tax paid and filed refund claim of interest paid. Though in view of the decision in the case of Indian National Ship Owners Association (Supra) Service tax was not leviable, the appellants did not claim refund of Service tax which implied that the appellants had admitted their Service tax liability. Since the liability was admitted, it should be paid with interest as held by Hon’ble Supreme Court in case of CCE vs. SKF India Ltd. 2009 (239) ELT 385 (SC) and therefore, the appeal was rejected.