RADICO KHAITAN LTD. Vs. CST AND ST, DELHI

JUDGEMENT

(1.) BRIEFLY stated facts of the case are that the appellants are registered with Service Tax department for providing taxable services viz. Business Auxiliary Services, information Technology Software Services, intellectual Property Services and Copyright and Transport of Goods by Road. The appellants filed an application for refund of service tax amounting to Rs. 9,40,343/ - on the grounds that they had entered into an agreement with M/s. Diageo Radico Distilleries Pvt. Ltd. (hereinafter referred to as M/s. DRDPL) for providing services of procurement and manufacturing of goods, Business Support, Sales and Distribution of Goods for which the consideration for the services and service tax was paid by DRDPL to them and accordingly due service tax was deposited, but later on DRDPL terminated the said service agreement with the appellants and the services were not provided by the appellants. Upon termination of agreement, the appellants returned the consideration alongwith service tax received to DRDPL. Since the appellants had already deposited the service tax for the months of July to September, 2008, the refund of the service tax paid was admissible to them. The adjudicating authority, vide impugned order rejected the refund claim of the appellants on the grounds that the refund claim was not sufficiently supported by proper documentary evidence; that the claim was not legally sustainable; and that it was not possible to ascertain that the incidence of tax had not been passed on by the appellants to any other person. Feeling aggrieved with the findings of the adjudicating authority, the appellants filed the appeal before Commissioner (Appeals) on the following grounds:

(2.) AFTER going through the impugned order of Commissioner (Appeals), I find that the short ground on which he has rejected the refund claim is that the same were not reflected as receivable in the balance sheet of the appellant. I find that otherwise there is no dispute on the fact that the Service Tax was deposited by the appellant in advance relating to the services which were to be provided by them to M/s. DRDPL. Further, there is no dispute that the said services were actually not provided, on account of cancellation of an agreement. Consequently the appellant was not required to pay any Service Tax in respect of the Services, which were not undertaken by them. There is also no dispute that the entire consideration received by them from M/s. DRDPL stand refunded, alongwith service tax amount. In the above scenario, denial of the refund on the sole technical ground that the same was not shown in the balance sheet, as receivable from the revenue, cannot be held to be just and fair. Though the appellant have contested the above findings of the Commissioner (Appeals), I am of the view that the irrespective of the non reflection of the tax amount in the balance sheet, the same is required to be refunded inasmuch as the same was not required to be paid by the assessee. Accordingly, I set aside the impugned order and allow the appeal with consequential relief to the appellant.