2010 (12) TMI 72 - AT - Service Tax

Refund of service tax deposited under protest - period of limitation - claims were rejected as time-barred - the apex court set aside the majority view taken by the Tribunals Larger Bench in National Winder vs. CCE, Allahabad 2003 -TMI - 46560 - SUPREME COURT OF INDIA - Commissioner (Appeals) followed the majority view - held that - the appellants, like buyers of excisable goods from manufacturers, are required to establish that their refund claims are within the statutory period of one year from the relevant date, viz. the date on which they paid service tax to the builder. - In view of decision in the matter of CCE, Mumbai-II vs. Allied Photographics India Ltd. 2004 -TMI - 46926 - SUPREME COURT OF INDIA

Summary

Issues:
Appeal against rejection of refund claims as time-barred.

Analysis:
The appeals were directed against the appellate Commissioner's order upholding the original authority's decision to reject refund claims as time-barred. The appellants had their residential houses built by a contractor who collected service tax from them and credited the amounts to the exchequer under protest. The refund claims were filed on 2.4.2008 but were rejected as time-barred. The main issue was whether the refund claims could be rejected as time-barred.

The appellate Commissioner's order contained apparent mistakes in the dates mentioned, leading to discrepancies in the records. The matter needed to be remanded to the original authority to determine if the refund claims were indeed time-barred. However, before remanding, a legal question needed to be addressed by the Tribunal, regarding whether the refund claims were liable to be rejected as time-barred.

The appellants relied on a circular of the Board and a stay order from the Tribunal to argue that the service availed from the builder was not taxable. They also cited a Supreme Court judgment in a similar case where duty paid under protest did not have a limitation period for refund claims. The Commissioner (Appeals) followed the majority view and rejected the refund claims as time-barred, contrary to the minority view accepted by the apex court.

The respondent argued that the buyers of excisable goods must comply with Section 11B of the Central Excise Act for claiming a refund of duty paid under protest by the manufacturer. The buyer cannot claim the benefit of the manufacturer's protest and must establish their own protest while paying the duty. The relevant date for refund claims should be the date of payment of service tax to the builder, and all refund claims were filed beyond the one-year limitation period.

The Tribunal found that the lower authorities did not consider the relevant provisions of law properly. The appellate authority applied a decision that was not valid in light of a Supreme Court ruling. The matter was remanded to the original authority for a fresh adjudication based on the correct interpretation of the law and principles of natural justice, ensuring the appellants are given a fair opportunity to present their case.