2013 (4) TMI 352 - AT - Service Tax

Refund claim rejected as time bar - Service provider, namely, M/s.Aban Offshore Ltd., has paid the impugned tax amount under the category of Mining Service without disputing the same - Held that - As it is settled law that unless the assessment has been disputed, no refund can be sanctioned as decided in M/s.Flock India (2000 (8) TMI 88 - SUPREME COURT OF INDIA) and M/s.Priya Blue (2004 (9) TMI 105 - SUPREME COURT OF INDIA). Prima facie, in this case, the assessments have not been challenged by the service provider who is the tax payer and, therefore, it cannot be said that the respondents have a prima facie case in their favour for grant of refund of the impugned amount. Also the respondents have filed the refund claim under Section 11 B of the Central Excise Act as made applicable in respect of service tax. The original authority and the lower appellate authority being creatures of the statute, prima facie are required to follow the statutory provisions while dealing with a refund claim filed under the same statute under Section 11B. Therefore it appears that the order passed by the lower appellate authority disregarding the provisions relating to limitation and unjust enrichment etc. provided under the said Section 11 B may not be legal and proper and beyond his jurisdiction. The balance of convenience lies in staying operation of the impugned order passed by the lower appellate authority allowing liberty to both parties to the dispute to file an application for early hearing considering the high amounts involved in this case.

Summary

Issues:
Refund claim filed by the recipient of the service, time-barred refund claim, applicability of Section 11B of the Central Excise Act to service tax refund claims, jurisdiction of the lower appellate authority to grant refund, balance of convenience in granting stay on the impugned order.

Analysis:
1. The respondents claimed a refund of service tax paid to M/s.Aban Offshore Ltd. for the supply and operation of a 'floating rig' under the category of Mining Service. The original authority rejected the refund claim citing various grounds, including time-bar for a specific amount. The lower appellate authority held that the activity falls under "Supply of Tangible Goods" service and directed the refund, leading to the department's appeal (para 2-3).

2. The department argued that as the service tax was paid by the provider, the recipient cannot claim a refund. They cited judgments supporting this argument and highlighted the applicability of Section 11B of the Central Excise Act for refund claims, emphasizing the limitation period. The respondents' failure to challenge the assessment was also noted (para 4).

3. The respondents opposed the stay petition, relying on the lower appellate authority's decision and citing relevant case laws. However, the Tribunal found that the service provider did not dispute the tax payment, essential for a refund. They also noted the lower appellate authority's potential disregard for statutory provisions under Section 11B (para 6-8).

4. Considering the arguments from both sides, the Tribunal found that the balance of convenience favored staying the lower appellate authority's order. They emphasized the need for both parties to have the opportunity for an early hearing due to the significant amounts involved in the case (para 9).

5. Ultimately, the stay petition filed by the department was allowed, providing both parties with the liberty to apply for an early hearing. The judgment highlighted the importance of following statutory provisions and ensuring a fair process in handling refund claims (para 10).