1. This appeal is directed against the Order-in-Appeal dated 9-7-2003 by which the Order-in-Original passed on 28-9-2001, rejecting the refund claim of the service tax amounting to Rs. 15,67,946/- of the appellant was upheld.2. The appellant filed a refund application on 25-5-98 for refund of Rs. 15,67,946/- in the light of the decision of the Supreme Court in M/s. Laghu Udyog Bharti v. Union of India , in which Sub-rules (xii) and (xvii) of Rule 2(1)(d) of the Service Tax Rules, 1944, to the extent they made persons other than the clearing and forwarding agents or the persons other than the goods transport operators as being responsible for collecting the service tax, are held to be ultra vires the provisions of the Finance Act, 1994. It was held therein that the tax was on the value of the services and it was only the person who provided the services that can be regarded as an assessee. The charge of tax was on the person who was responsible for collecting the service tax. It was he who was regarded as the assessee and he was the person who provided the services. The Supreme Court had ordered that any tax which had been paid by the customers or clients of the clearing and forwarding agents or of the goods transport operators shall be refunded within twelve weeks on their making a demand for refund.
3. The learned Assistant Commissioner taking note of the statutory provisions contained in Section 117 of the Finance Act, 2000 by which the provisions that were struck down were deemed to be valid and to have always been valid as if they had been in force at all material times held that such validation had retrospective effect from 16-7-1997, and it removed the lacuna pointed out by the Supreme Court in Laghu Udyog (supra). The Commissioner (Appeals) confirmed the findings of the adjudicating authority and noted the effectiveness of the validation of the provisions which were struck down and upheld the order of the adjudicating authority.
4. When this matter is called out for hearing, the learned Counsel appearing for the parties drew our attention to the decision of the Supreme Court in Gujarat Ambuja Cements Ltd. v. Union of India, , in which the Supreme Court has upheld the constitutional validity of the provisions of Section 116 and 117 of the Finance Act, 2000. In paragraph 15 of the judgment, the Supreme Court, referring to the decision in Laghu Udyog, observed that the writ petitioners made applications for refund of the tax paid by them and in some cases, the tax was refunded, while in some cases the refund of the tax was not made on the ground that the petitioners had failed to prove that the tax paid had not been passed on to other persons. In paragraph 23 of the judgment it was held that the law must be taken as having always been as is now brought about by the Finance Act, 2000 and that the statutory foundation for the decision in Laghu Udhyog Bharti has been replaced and that decision is thereby ceased to be relevant for the purposes of construing the present provisions. The Supreme Court negatived the contention that by amendment to Section 116 and Section 117 of the Finance Act, 2000, the decision in Laghu Udyog has been legislatively overruled. In paragraph 44 of the judgment, the Supreme Court held that in those cases in which the tax may have been paid but not refunded to the writ petitioners, for whatever reason, there is no question of levy of any interest or penalty at all.
5. It is, therefore, clear from the decision of the above Supreme Court that the constitutional validity of the validating provisions was upheld. Therefore, the service tax which was paid by the present appellant will be deemed to have been paid under the validated provisions. The question of refund of service tax which now is deemed to have been paid under the provisions which are validated retrospectively cannot, therefore, arise. There is, therefore, no warrant for the interference with the impugned order. The appeal is, therefore, dismissed.