2024-VIL-201-BOM-ST
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SERVICE TAX High Court Cases

Service tax – Import under CIF Contract - Demand of service tax on ocean freight under reverse charge mechanism - whether the appellant is liable to pay service tax on the service on Ocean Freight – Refund of tax already deposited - HELD - the division bench of the Gujarat High Court in SAL Steel Ltd. had considered the challenge to the relevant notifications in the context of the service tax on transportation of goods by a vessel from a place outside India. The impugned provisions were held ultra vires of Section 64, 65(B), 44, 66(B), 67 and 68 and 94 of the Finance Act, 1994. It was held that importers in CIF contracts were neither service providers nor service receivers in respect of transport of goods by vessel from place outside India, and that service tax cannot be recovered from third party who is neither the service provider nor the service receiver - the Petitioners’ challenge to the impugned notifications succeed on the ground that the said notifications were set aside in the case of SAL Steel Ltd. - In so far as recovery of IGST from the importer on the service of transportation of goods, in a vessel provided by a person located in a non-taxable territory to a person located in a non-taxable territory is concerned, such challenge would stand covered in favour of petitioner by the decision in Union of India Vs. Mohit Minerals Pvt. Ltd - the Revenue contention Petitioner had voluntarily deposited the amount and hence the Petitioner would not be correct in seeking any refund, is also not acceptable. Any such deposit or even demand would certainly be without authority in law and therefore violative of Article 265 of the Constitution - Petitioner is entitled to the refund of duty, however, subject to the Petitioner filing the refund application which would be required to be decided in accordance with law including on the principles of unjust enrichment – the writ petition is allowed
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