Refund service tax paid by 3 travel portals: Delhi HC asks excise dept

 Delhi High Court on Thursday directed the central excise intelligence to refund the service tax collected from travel portals, Ibibo, Makemytrip and Ebiz, saying the payment made by them "was not voluntary but under coercion and duress".

Asking the Director General of Central Excise Intelligence (DGCEI) to refund the amount within four weeks, a bench of justices S Muralidhar and Vibhu Bakhru also pulled it up for "unwarranted" arrest of a senior official each from Makemytrip (MMT) and Ebiz, saying the action by the department was without following the procedure laid down under the law. In a stern order, the court also directed DGCEI to pay costs of Rs one lakh to each of the three companies within four weeks.

It made it clear that any delay over weeks in refunding the service tax amount would "make DGCEI liable to pay simple interest at six per cent per annum on the said amount from the date on which it becomes due in the of this order till the date of payment". The order came on the pleas of the three companies challenging the action taken against them by DGCEI which had accused them of evading service tax to the tune of several crore rupees.

Makemytrip and Ibibo had in their pleas also questioned the powers of DGCEI of arrest, investigation and assessment of service tax under the provisions of the Finance Act, 1994.