2011 (5) TMI 813 - AT - Service Tax

Refund - refund claim rejected on the ground that the claimant (assessee) had not challenged the final assessment of the ST-3 returns and on the further ground that their refund claim was time-barred - main ground raised by the appellant is that the service tax was paid under protest and hence the limitation provisions of Section 11B of the Central Excise Act read with Section 83 of the Finance Act, 1994 are not applicable - orders of the lower authorities are set aside and this appeal is allowed by way of remand

Summary

Issues:
- Rejection of refund claim
- Applicability of limitation provisions
- Payment of service tax under protest
- Lack of provision for assessment of ST-3 returns

Analysis:
The appeal before the Appellate Tribunal CESTAT, Mumbai pertains to the rejection of a refund claim by the assessee. The appellant had paid service tax with education cess for a specific period and later claimed a refund for the excess amount paid. The department issued a show-cause notice proposing to reject the refund claim on the grounds that the final assessment of the ST-3 returns was not challenged and that the refund claim was time-barred. The original authority and the appellate authority upheld the rejection of the refund claim, leading to the current appeal.

The main contention raised by the appellant is that the service tax was paid under protest, thereby arguing that the limitation provisions of the Central Excise Act and the Finance Act should not be applicable. The appellant also argued that there is no provision for the assessment of ST-3 returns, and therefore, there is no requirement to challenge them. The appellant cited relevant case laws to support their arguments.

Upon examination of the records, the Tribunal noted that the TR-6 challan indicated the payment of service tax "Under Protest (Provisional)," but the lower authorities did not receive any documentary evidence supporting this claim. Additionally, the lower authorities did not consider why the payment was made under protest. The appellate authority rejected the refund claim solely on the ground of limitation without addressing the main contention raised in the show-cause notice. The Tribunal acknowledged that the lower authorities did not have the opportunity to consider the relevant case laws cited by the appellant.

In light of the above circumstances, the Tribunal decided to set aside the orders of the lower authorities and remand the case for de novo adjudication by the original authority. The original authority was directed to issue a fresh speaking order on the refund claim after considering the TR-6 challans, case law, and other relevant factors. The Tribunal emphasized that the appellant should be given a reasonable opportunity to present their case during the adjudication process.