2009 (6) TMI 597 - AT - Service Tax

Refund limitation no dispute that amount not payable during relevant period order upholding adjudication order on recovery relying on sec. 117of customs Act - retrospective amendment recovery period within 30 days SCN hit time-bar order set aside

Summary

Issues:
Recovery of erroneously refunded Service Tax amount under Sections 116 and 117 of Finance Act, 2000.

Analysis:
The appeal was against the Order-in-Appeal passed by the Commissioner of Customs and Central Excise, Hyderabad, for the recovery of a refunded Service Tax amount. The appellant, M/s. India Cements Ltd., had paid Service Tax on services provided by their C & F agents during a specific period. Following a Supreme Court decision, they claimed a refund which was duly sanctioned and paid to them. Subsequently, a Show Cause Notice was issued for the recovery of this refunded amount based on Sections 116 and 117 of the Finance Act, 2000. The Adjudicating authority upheld the demand for repayment, leading to the appeal to the Commissioner (Appeals) and eventually to the Tribunal.

The main contention raised by the appellant was that the Show Cause Notice for recovery was issued beyond the 30-day period stipulated in Section 117 of the Finance Act, 2000. The appellant argued that the impugned order should be set aside solely on this ground. On the other hand, the Jt. CDR contended that the erroneous refund could be recovered through a Show Cause Notice issued in accordance with the law.

The Tribunal analyzed the provisions of Sections 116 and 117 of the Finance Act, 2000, which were relied upon for the recovery of the refunded amount. Section 117 validated actions taken under the Service Tax Rules and mandated the recovery of erroneously refunded Service Tax within 30 days from the date of the President's assent to the Finance Act, 2000. The Tribunal noted that the Show Cause Notice in this case was issued beyond the prescribed time limit, as it should have been issued by a specific date calculated from the President's assent. As the Notice was served later than required, the Tribunal found that the Revenue had not initiated recovery within the stipulated period, rendering the demand for repayment incorrect and improper.

Consequently, the Tribunal held that the impugned order was unsustainable and set it aside, allowing the appeal with any necessary consequential relief. The judgment highlighted the importance of adhering to statutory timelines and procedures in matters of refund recovery under the relevant provisions of the Finance Act, 2000.