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2011 (9) TMI 447 - HC - Service TaxRefunds - assessee paid service tax on the interest collected from customers voluntarily and not under protest - Claim made under Article 265 of the Constitution of India and Section 72 of the Contract Act. - Held that - Constitution Bench of the apex Court in the case of Mafatlal Industries Ltd. v. Union of India (1996 (12) TMI 50 - SUPREME COURT OF INDIA) had an occasion to go into this question - When act provides a complete mechanism for correcting any errors whether on fact or on law the burden is to work out his remedy within four corners of law. If the remedy is to be worked out within the four corners of law the party has accepted invoking the jurisdiction of the authority to refund within the period prescribed under the Act. - refund not granted - appeal dismissed.
Issues:
1. Refund claim beyond statutory time limit. 2. Interpretation of Section 11B of the Finance Act, 1994. 3. Applicability of limitation period for refund claims. 4. Jurisdiction of authorities in revising refund orders. 5. Legal position on refund claims outside the purview of the Act. Issue 1: Refund claim beyond statutory time limit The case involved a Private Limited Company registered under Banking and Financial Services, which paid service tax on interest collected from customers but later realized that the interest charged on loans was not liable for service tax. The company filed a refund claim under Section 11B of the Finance Act, 1994, for the period from July 2001 to August 2004. The adjudicating authority allowed the claim in full, but the Commissioner initiated proceedings to revise the order, determining that only a portion of the claimed amount was leviable, as the rest was time-barred. The Tribunal upheld this decision, leading to the company's appeal. Issue 2: Interpretation of Section 11B of the Finance Act, 1994 The company contended that the claim for refund beyond one year was not time-barred, as the tax paid was not due under the Act, citing a Division Bench judgment. However, the Court noted that the tax was paid voluntarily and not under protest, falling within the Act's purview. The Court emphasized that if a refund is sought for a payment made under the Act, it must be done within the prescribed time. The Court referred to the Mafatlal Industries Ltd. case, stating that refund claims outside the Act's provisions can be made through a suit or writ petition, with a specific limitation period. Issue 3: Applicability of limitation period for refund claims The Court clarified that all refund claims not falling under specific exceptions must be filed and adjudicated under the Central Excise Act or Customs Act. It emphasized the Act's mechanism for correcting errors and the need to seek remedies within the legal framework. The judgment highlighted that if a remedy falls within the Act's provisions, the claimant must adhere to the prescribed time limits, as failure to do so renders the claim time-barred. Issue 4: Jurisdiction of authorities in revising refund orders The revisional authority's power to interfere with refund orders was discussed, emphasizing that once a party chooses a forum and succeeds in obtaining a refund, the authority can interpret Section 11B. The Court underscored that if a refund claim is not filed within the Act's stipulated time, it becomes time-barred, in line with the law laid down by the Apex Court. Issue 5: Legal position on refund claims outside the purview of the Act The judgment reiterated that claims falling outside the Act's purview can be made through a suit or writ petition, with a specific limitation period. It emphasized the need to work out remedies within the legal framework provided by the Act, rejecting the company's argument that the claim was not time-barred. The Court upheld the Tribunal's order as per the law declared by the Apex Court, dismissing the appeal. In conclusion, the Court dismissed the appeal, affirming the Tribunal's decision that the refund claim beyond the statutory time limit was time-barred, emphasizing the importance of adhering to prescribed time limits for refund claims falling within the Act's purview.
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