2018 (9) TMI 1876 - AT - Service Tax

Refund of service tax paid - service tax was paid for the services which were exempt - time limitation - refund rejected on the sole ground that the application is filed beyond the stipulated time frame and accordingly, is barred by limitation of time as per Section 11B of the Act - HELD THAT - Learned Commissioner (Appeals) in the impugned order, though has upheld rejection of refund application, but has relied upon the provisions of Section 109 of the Finance Act, 2013, which was not the stand taken by the original authority in the adjudication order. Thus, I am of the view that rejection of refund application under Section 109 of the Act, 2013 is not legal and proper. Time limitation - HELD THAT - The application for refund was filed by the appellant on 13.06.2014, which was within the limitation period of one year from the date of payment of service tax amount. Thus, rejection of refund application on the ground of limitation is not sustainable. Further, the Finance Act, 2013 dealing with the VCES Scheme does not impose any restriction for non-filing of refund application under Section 11B of the Act. Since, the Central Excise statute in Section 11B permits the assessee to file the refund application, claiming refund of duty/service tax, the provisions of Section 109 of the Act, 2013 cannot be relied upon to deny the refund benefit to the appellant. Appeal allowed - decided in favor of appellant.

Summary

Issues: Refund application rejection based on limitation under Section 11B of the Central Excise Act, 1944 and the applicability of Section 109 of the Finance Act, 2013.

Analysis:
1. Refund Application Rejection based on Limitation: The appellant had received rental income for letting out properties, falling under the taxable category of "Renting of immovable Property Service." The appellant filed a refund application after realizing that service tax was wrongly deposited. The original authority rejected the application citing limitation under Section 11B of the Act. However, the Tribunal found that the application was filed within the one-year limitation period from the date of payment, making the rejection on the ground of limitation unsustainable.

2. Applicability of Section 109 of the Finance Act, 2013: The Learned Commissioner (Appeals) upheld the rejection of the refund application based on Section 109 of the Finance Act, 2013, a stand not taken by the original authority. The Tribunal deemed this reliance as not legal and proper. The Tribunal highlighted that the Finance Act, 2013, related to the VCES Scheme, did not restrict the filing of refund applications under Section 11B of the Act. As Section 11B allows for filing refund applications, the provisions of Section 109 of the Act, 2013, could not be used to deny the refund benefit to the appellant.

3. Conclusion: The Tribunal set aside the impugned order, allowing the appeal in favor of the appellant with the consequential benefit of refund. The rejection of the refund application based on limitation was deemed unsustainable, and the reliance on Section 109 of the Finance Act, 2013, was considered improper. The Tribunal's decision favored the appellant, emphasizing the legal right to claim a refund under the applicable provisions of the Central Excise Act and the Finance Act.