2011 (8) TMI 282 - AT - Service Tax

Refund claim - Limitation - There is no dispute about factual position that the service tax was originally paid by the assessee through cenvat credit account - It is only at the instance of the Revenue based upon the audit objection that they subsequently paid service tax by TR.6 challan. - The said directions of the Revenue were followed by the appellant who deposited the service tax by cash vide T.R.6 challan dt.5.12.05 - With the deposit of service tax in cash the respondent immediately became entitled to reversal of debit entry in their cenvat credit account - They have filed refund claim on 1.8.2006 i.e. within period of one year from the deposit of the service tax in cash - As such it is seen that the cause of action arose on 5.12.2005 - Apart from observing that such adjustment arising as a consequent by paying service tax in cash ought to be done as consequent to such payment we note that the cause of action having been arisen on 5.12.2005 the said date should be taken as the relevant date for the purpose of limitation - As such in any case the refund claim filed on 1.8.2006 is within a period of one year find not infirmity in the impugned order of the Commissioner (Appeals).

Summary

Issues:
Refund claim time limitation under Section 11B of Central Excise Act, 1944.

Analysis:
The case involved a dispute regarding a refund claim for service tax paid twice by the appellant. Initially, the appellants paid service tax through their Cenvat Credit Account, but later, upon objection by the audit team, they paid the same amount through a cash challan. The original adjudicating authority held that the refund claim was time-barred as it was filed after one year. However, the Commissioner (Appeals) ruled in favor of the assessee, stating that the payment made through cash was essentially a restoration of credit and not subject to the time limitation under Section 11B. The Tribunal concurred with the Commissioner, emphasizing that the cause of action for the refund arose when the appellants paid the tax in cash, and since the refund claim was filed within one year of this payment, it was deemed valid. The Tribunal rejected the Revenue's appeal, upholding the decision of the Commissioner (Appeals).

This judgment clarifies that the time limitation for refund claims under Section 11B of the Central Excise Act, 1944 may not apply in cases where the payment made is essentially a restoration of credit or an accounting adjustment. The Tribunal emphasized that the cause of action for a refund claim arises when the taxpayer makes the payment in question, rather than when the original tax was paid. Therefore, in situations where a taxpayer pays tax twice due to administrative directives, the time limit for filing a refund claim should be calculated from the date of the subsequent payment. The decision highlights the importance of considering the specific circumstances of each case when determining the applicability of statutory time limits for refund claims in indirect tax matters.