2011 (8) TMI 956 - AT - Service Tax

Refund claim - the refund claim arising as a result of sanction of refund order, such claims are not to be rejected on the issue of limitation. One such reference can be made to a latest order of the Tribunal in the case of Opel Alloys Pvt. Ltd. vs. Commissioner of Central Excise, Ghaziabad reported as 2009 -TMI - 76196 - CESTAT, NEW DELHI - It stands held that, after considering various precedent decisions that the amounts deposited during the course of investigation and appropriated by the adjudicating authority on confirmation of demand, are required to be refunded without deciding the same on the terms of limitation, when such confirmation orders are set aside by the higher authorities

Summary

Issues:
Refund of Service Tax deposits challenged on the grounds of limitation.

Analysis:
The case involved manufacturers of cement availing services of Goods Transport Operators without paying Service Tax. The department directed the appellants to deposit the Service Tax on the received services due to unclear legal position during the relevant period. The appellants complied and deposited the amounts on various dates. Subsequently, proceedings were initiated to confirm the deposits. The original adjudicating authority confirmed the deposited Service Tax amount, but the Commissioner (Appeals) set aside the orders, allowing the appeals with consequential relief. The appellants then filed refund claims within a week of the Commissioner (Appeals) order. The Deputy Commissioner partially allowed the refund claims within one year of deposits but rejected the rest as time-barred. The Commissioner (Appeals) upheld the rejection, leading to the current appeals.

Upon review, the Tribunal noted that the first order of the Commissioner (Appeals) had attained finality as it was not challenged by the Revenue. The original adjudicating authority had granted refunds within one year of deposit, but rejected the balance as time-barred. The central issue was whether claims arising from the appellate order could be rejected as time-barred. The Tribunal referred to precedent judgments, including Opel Alloys Pvt. Ltd. vs. Commissioner of Central Excise, Ghaziabad, which held that refund claims resulting from appellate orders should not be rejected based on limitation. Following this precedent, the Tribunal ruled that the appellants' refund claims for Service Tax deposits, directed by authorities and confirmed by the adjudicating authority but set aside by the Commissioner (Appeals), must be sanctioned without applying the limitation bar. Consequently, the appeals were allowed, granting relief to the appellants.