2015 (6) TMI 510 - AT - Service Tax

Recovery of erroneous refund claim allowed earlier - Assessee provides telecom services sold recharge vouchers (RCV) to distributors at a discount to the printed MRP - since the value realised on sale of RCVs was less than the MRP, they claimed refund of excess service tax paid - Held that - Revision proceedings initiated by the Commissioner must be completed by passing an order within two years from the date on which the order sought to be revised has been passed. In this case the order sought to be revised was passed on 9.07.2008 and therefore order of Commissioner is required to be passed before 8.7.2010 which was done. However the requirement of clause (1) that the Order is subject to the provisions of Section 73 has to be met simultaneously. That is, the requirement of Section 73 has to be fulfilled. Section 73 (1) of the Finance Act is the provision in service tax law with regard to, inter alia, recovery of amounts erroneously refunded. The Section specifically lays down the procedure and time period within which Show Cause Notice must be issued for recovery of erroneous refunds. Show cause notice as contemplated under section 11A of the Central Excise Act is required to be issued for recovery of erroneously refunded amounts within the time limit as provided in that Section from the relevant date and not through proceedings under section 35E. Although these decisions were rendered in the context of the Central Excise Act, the ratio will apply in the context of Service Tax law because the provisions of recovery and review under sections 11A and 35E of the Central Excise Act are identical to the provisions under Section 73(1) and erstwhile Section 84 of the Service Tax law. - Decision in the case of Best and Crompton Engg. Ltd. vs Commissioner C.EX. Chennai 2000 (9) TMI 91 - CEGAT, NEW DELHI - Decided against Revenue.

Summary

Issues:
1. Interpretation of Section 84 of the Finance Act 1994 regarding revision of orders by the Commissioner of Central Excise.
2. Validity of the show cause notice for recovery of service tax erroneously refunded.
3. Application of time limitations under Section 73 for issuing show cause notices.

Analysis:

Issue 1: Interpretation of Section 84
The appeal involved a dispute over the interpretation of Section 84 of the Finance Act 1994, specifically focusing on the Commissioner's authority to pass orders in revision proceedings. The Commissioner relied on the provisions of the erstwhile Section 84, which required orders to be subject to the provisions of the chapter, leading to a discussion on the time limitations and procedural requirements under this section.

Issue 2: Validity of the Show Cause Notice
The key contention was whether the show cause notice issued for recovery of erroneously refunded service tax was within the prescribed period of limitation. The Commissioner's order emphasized the importance of complying with the time limits set out in Section 73(1) for issuing such notices, highlighting the need for adherence to procedural requirements for recovery actions.

Issue 3: Application of Time Limitations under Section 73
The Tribunal analyzed the interplay between Section 84 and Section 73 of the Finance Act 1994 concerning the recovery of erroneously refunded amounts. Emphasizing the necessity of issuing show cause notices within the specified time limit of one year from the relevant date, the judgment underscored the procedural significance of adhering to statutory timelines for recovery actions.

Overall, the Tribunal upheld the impugned order, dismissing the Revenue's appeal based on the interpretation of statutory provisions and the procedural requirements outlined in the Finance Act 1994. The decision underscored the importance of procedural compliance and adherence to statutory timelines in matters concerning the recovery of erroneously refunded amounts, providing a comprehensive analysis of the legal issues involved in the case.