2011 (12) TMI 368 - AT - Service Tax

Refund - Erection and Commissioning - The adjudicating authority sanctioned the refund of Rs. 16,068/- and rejected the refund of Rs. 3,02,944/- on the ground that they have filed refund claim towards double payment on 29.05.09 which is after expiry of one year limitation time period prescribed under section - the submissions made by the learned counsel that they were entitled to suo motu credit and therefore there was nothing wrong in availment of the credit has to be sustained - Tribunal took the view that appellants cannot be penalized for action taken by them at the instance of Revenue Authorities which itself was not in accordance with law. In this case also appellants took suo motu credit on 17.03.09 - It has to be noted if the Range Superintendent were to advise the appellant to file a refund claim immediately after reversing the entry, the refund claims would not have been time barred at all - Appeal is allowed

Summary

Issues:
1. Refund claim rejection due to the expiry of the one-year limitation period from the date of payment of service tax.

Analysis:
The appellant provided Erection and Commissioning service to two companies, paid service tax, and later realized they made a double payment. The appellant filed a refund claim, but the adjudicating authority rejected a part of the claim as it was submitted after the one-year limitation period prescribed under the law. The appellant contested this decision, arguing that the credit taken in their cenvat credit account was a correction entry and not a due payment, citing legal precedents to support their position.

2. Entitlement to re-credit of the amount reversed in the cenvat credit account.

The appellant's counsel argued that they were entitled to re-credit the debit entry made earlier, as supported by Tribunal decisions. The appellant's claim for a refund was based on the date of reversal of the entry, not the original payment date. The Tribunal agreed with the appellant, emphasizing that the refund claim was not time-barred, especially considering the advice received from the Range Superintendent. The Tribunal highlighted that the appellant's actions were in line with legal principles and that they should not be penalized for following the Revenue Authorities' advice, which was not legally sound. Ultimately, the Tribunal allowed the appeal, ruling in favor of the appellant's entitlement to the refund amount.

In conclusion, the Tribunal found that the appellant was eligible for the refund claim, overturning the rejection based on the limitation period and emphasizing the correct legal interpretation regarding the re-credit of the amount in the cenvat credit account. The decision was based on legal principles, equity, and precedents cited during the proceedings, ultimately granting the appellant the right to the refund amount.