2014 (6) TMI 425 - AT - Service Tax

Denial of refund claim - renting of immovable property service - Bar of limitation - Held that - appellant has paid service tax during the impugned period for which they are not required to pay service tax at all as clarified by CBEC. As the payment made by the appellant is not of service tax, therefore, as held by this Tribunal in the case of Shankar Ramchandra Auctioneers (2010 (4) TMI 391 - CESTAT, MUMBAI) the provisions of section 11B of the Central Excise Act are not applicable. Therefore, the refund claim filed by the appellant is not time barred - appellant are entitled for refund claim as filed in time and the provisions of section 11B of the Central Excise Act, 1944 are not applicable to the facts of this case - Decided in favour of assessee.

Summary

Issues:
Refund claim rejection based on limitation under section 11B of the Central Excise Act.

Analysis:
The appellant appealed against the rejection of their refund claim by lower authorities, citing it as time-barred under section 11B of the Central Excise Act. The appellant rented premises to CESTAT, Mumbai and paid service tax on the rent received. However, CESTAT did not pay the service tax to the appellant, seeking clarification from CBEC on their liability. Upon clarification that CESTAT was not liable to pay service tax during the period in question, the appellant claimed a refund within one year. The initial refund claim was accepted, but the rest was rejected as time-barred under section 11B. The appellant contended that since CBEC clarified they were not liable to pay service tax, section 11B did not apply, citing the case of CCE vs. Shankar Ramchandra Auctioneers. Conversely, the respondent relied on the Mafatlal Inds. case, stating all refunds are governed by section 11B.

The Tribunal considered both arguments and found in favor of the appellant. It was determined that as the appellant paid service tax during a period they were not required to, as confirmed by CBEC, section 11B did not apply. Citing the Shankar Ramchandra Auctioneers case, the Tribunal held that the refund claim was not time-barred. The Tribunal distinguished the Mafatlal Inds. case, stating it was not relevant to the present circumstances. Consequently, the Tribunal allowed the appeal, setting aside the impugned order and directing the Adjudicating authority to implement the decision within 30 days.

In conclusion, the Tribunal ruled in favor of the appellant, declaring their entitlement to the refund claim as filed within the stipulated time and determining that section 11B of the Central Excise Act did not apply to the case. The decision was made based on the clarification from CBEC and the specific circumstances of the matter, leading to the allowance of the appeal with consequential relief.