Margadarsi Marketing Pvt. Ltd. Vs Commissioner of Central Excise & Service Tax (CESTAT Hyderabad)
The Customs Excise and Service Tax Appellate Tribunal, Hyderabad Bench considered two appeals filed against orders that upheld rejection of refund claims relating to service tax. The disputed amounts were ₹1,04,26,238 for the period July 2004 to February 2006 and ₹4,60,44,550 for the period July 2006 to March 2010. The appellant had provided services to Ushodaya Enterprises Ltd, which the department treated as Business Auxiliary Service (BAS). Earlier, the Tribunal in an order dated 05.04.2010 examined the activities and divided them into two categories: space selling service and newspaper promotion service. It held that services relating to the sale of space would become taxable only from 01.05.2006 and therefore could not be taxed for the earlier period from 09.07.2004 to 28.02.2006. Consequently, the Tribunal held that service tax paid on such activities during that period was not payable and was liable to be refunded, subject to the bar of unjust enrichment and quantification of the amount.
Following that order, the appellant filed refund claims. The department rejected the claims mainly on the grounds that the appellant failed to establish the amount of service tax paid relating specifically to space selling services and also failed to prove that the incidence of tax had not been passed on to another person. The authorities observed that the documents submitted, such as ST3 returns and challans, showed consolidated payment of service tax under BAS without any separate breakup between space selling and newspaper promotion activities. Since invoices or other records segregating the two activities were not produced, the refund sanctioning authority could not quantify the exact refund amount attributable to space selling services.
