Summary
The assessee’s four-year delay and failure to appeal the service-tax adjudication defeated a refund claim based on success in other litigation. Nevertheless, the tax on the relevant overseas-agent commission was legally unavailable before Section 66A took effect. Balancing those considerations, the Court retained the already paid principal but set aside outstanding interest and penalty.
Issues
- Whether later decisions and the circular revived an unchallenged service-tax demand for purposes of refund.
- Whether interest and penalty could still be enforced on the legally inapplicable tax.
Held
- Watching others litigate did not create a fresh cause to challenge the final adjudication years later. The circular addressed pending disputes and did not reopen completed cases such as this one. (¶ 9–19)
- For the disputed July 2004–March 2006 period, the charging basis arose only from 18 April 2006. That declaration of law was not confined to earlier litigants. Although delay precluded refund of the paid tax here, equity required removal of unpaid interest and penalty. (¶ 20–22)
Result
Appeal partly allowed without costs; interest and penalty demands set aside, with no refund of the principal tax already paid.