2007 (7) TMI 250 - AT - Service Tax

Appellant is required to deposit Rs. 1, 38, 781/- being the refund erroneously sanctioned - appellant stated that he paid service tax on the interest collected under a mistaken notion of law - Hence the refund claim was filed part of refund claim was held time-barred in view of various decisions held that when the department collects any levy which is not authorized by law then the same should be refunded and it will not be hit by the provisions of Section 11B stay granted

Summary

Issues involved:
Refund claim erroneously sanctioned, time limitation for recovery, applicability of Section 11B of the Central Excise Act, waiver of deposit, stay of recovery proceedings.

Analysis:
1. The appeal was filed against the Order-in-Revision passed by the Commissioner of Central Excise and Service Tax, Mysore, demanding the deposit of Rs. 1,38,781 being the refund erroneously sanctioned to the appellant. The appellant had paid service tax on interest collected under a mistaken notion of law and later realized the error, leading to a refund claim for the amount paid during a specific period. The Original Authority sanctioned the refund, but the Commissioner initiated review proceedings and found a part of the amount paid to be time-barred. The appellant's counsel argued that unauthorized levies should be refunded, citing various case laws and the decision in Mafatlal Industries case regarding the refund not being governed by Section 11B of the Central Excise Act in cases of incidental levy.

2. The appellant's counsel relied on several case laws to support the argument that unauthorized levies should be refunded, including National Tobacco Corporation of India, Haxacom (I) Ltd. v. CCE, CCE v. M.A. Financial Services, Karnik Maritime Pvt. Ltd. v. CCE, CCE v. Jai Laxmi Finance Co., and CCE v. Indian Ispat Works (P) Ltd. The Senior Departmental Representative (SDR) was unable to provide contrary decisions.

3. After considering the arguments presented, the Member (T) of the Appellate Tribunal CESTAT Bangalore found sufficient justification to waive the deposit of the amount demanded. It was noted that the appellant had a prima facie strong case on merits. Consequently, the Member ordered the waiver of the deposit and stayed the recovery proceedings until the appeal is decided.

This detailed analysis of the judgment addresses the issues involved in the appeal, including the refund claim, time limitation for recovery, the applicability of Section 11B of the Central Excise Act, the arguments presented by the appellant's counsel, reliance on case laws, the absence of contrary decisions from the SDR, and the decision of the Member to waive the deposit and stay the recovery proceedings.