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Service receiver may claim refund of wrong service tax paid by
service provider even when the same is not shown separately on the
invoice, provided the service provider has discharged service tax
considering receipts to be inclusive of the service tax.
Facts:
The
service provider paid service tax, treating the amount received as
inclusive of service tax and thereafter, filed a refund claim as the
services were not taxable. However, the claim was rejected on the ground
of unjust enrichment, as service tax was passed on to their customers.
Accordingly, service receiver i.e. the appellants filed a refund claim.
The refund claim was rejected on the ground that there was no evidence
of payment of service tax by them and the procedure provided under Rule
4A of Service Tax Rules, 1994 was not followed. During the appellate
proceedings, the appellants submitted the proof of payments of service
tax to service provider and claimed that since service itself was not
taxable, issue of invoice was not required under the service tax law.
Held:
The
evidences produced by appellant were sufficient to demonstrate payment
of service tax. Since service tax was not collected separately, the
payments had to be considered to be inclusive of service tax.
Non-observance of Rule 4A of Service Tax Rules, 1994 was irrelevant.
However, penalties may be levied on the service provider as against
rejection of the refund claim of the service receiver. Therefore, since
the appellants had borne the service tax brunt, the appeal was allowed.
