2012 (11) TMI 128 - AT - Service Tax

Delay in filling of refund application u/s 11B Appellant provide agency commission service - Which was amounted to export of services in terms of Export of Service Rules 2005 - Service Tax refund claim u/s 83 was filed with SCE - Claim was filer after the time limit of one year as per Sec. 11B Held that - Application for refund are to be filed with the Assistant Collector of Central Excise u/s 11B, whereas this letter has been filed with the Superintendent of Central Excise which is not as per the provisions of Sec. 11B. From the facts on record that the last payment of the service tax was made on 1st December 2007 and refund claim was present on April 28, 2010 is also beyond one year from the date of payment. Appeal decides in favour of revenue

Summary

Issues:
1. Whether the refund claim filed by the respondent is within the time limitation as prescribed under Section 11B of the Central Excise Act.

Analysis:
1. The appeal was filed by Revenue against an Order-in-Appeal passed by the Commissioner of Customs, Central Excise & Service Tax (Appeals) Goa. The respondent, a telecommunication products manufacturer, entered into an agency commission agreement with a foreign principal for marketing services. They believed this activity fell under Business Auxiliary Services and paid service tax accordingly. The respondent filed a refund claim for the service tax paid, which was rejected by the original authority due to being time-barred under Section 11B of the Central Excise Act.

2. The Revenue contended that the refund claim was indeed time-barred as per Section 11B, citing the Supreme Court's decision in Mafatlal Industries Ltd. vs. Union of India. They argued that the introduction of Export of Service Rules in 2005 did not absolve the respondent of service tax liability prior to that date. The Revenue also referenced a Tribunal decision to support their stance on statutory provisions.

3. The respondent argued that the time limit under Section 11B does not apply when no tax is payable due to a misunderstanding of the law. They claimed that their service tax payment was made under a bona fide mistake, and thus, the time limit should not be enforced. Citing relevant case law, they contended that the provisions of Section 11B do not apply in such circumstances.

4. An alternative argument was made by the respondent, suggesting that a letter sent in 2009 could be considered an application for refund. However, the Tribunal found that this letter did not comply with the requirements of Section 11B and was also time-barred. The Tribunal concluded that the refund claim was not filed within the prescribed time limit and set aside the Order-in-Appeal, allowing the Revenue's appeal.

5. The Tribunal highlighted that the decisions relied upon by the Commissioner (Appeals) were based on writ petitions filed under Article 226 of the Constitution, which did not align with the law laid down by the Supreme Court in the Mafatlal Industries Ltd. case. The Tribunal also rejected the respondent's alternative submission, emphasizing that the claim was time-barred under Section 11B. Ultimately, the Tribunal ruled in favor of the Revenue, setting aside the Order-in-Appeal.