2016 (6) TMI 1106 - AT - Service Tax

Refund of service tax paid on Construction of complex service wrongly - period of limitation - payment of service under mistake of law - it is submitted that, appellants carried out such construction activities for themselves and for their own purposes and not for any one else - Held that - this Tribunal in the case of XL Telecom Ltd 2006 (3) TMI 641 - CESTAT, BANGALORE has held that even in respect of illegal levy, refund claim has to be filed within the time limit prescribed under the Central Excise Act 1944. The judgments relied upon by the counsel for the appellant is not applicable in the facts and circumstances of this case and moreover the judgment of the Hon ble Karnataka High Court in the case of CCE Vs KVR Constructions 2012 (7) TMI 22 - KARNATAKA HIGH COURT was held to be not a good law by the Hon ble Karnataka High Court in subsequent decision in the case of MCI Leasing Pvt Ltd 2011 (9) TMI 447 - KARNATAKA HIGH COURT . - Period of limitation of one year is applicable - Decided against the assessee.

Summary

Issues:
1. Refund claim rejection by Commissioner (Appeals)
2. Applicability of time limit under Section 11B of Central Excise Act
3. Rejection of refund for non-production of documents

Analysis:
1. The appeal challenged the rejection of the appellant's refund claim by the Commissioner (Appeals) and upheld by the Assistant Commissioner. The appellant, a partnership firm engaged in property development, sought a refund of ?5,52,998. The Commissioner rejected the claim on the grounds of time limitation and non-production of relevant documents. The appellant argued that the construction activities carried out were not taxable before 01.07.2010, citing legal provisions and circulars to support their claim.

2. The appellant contended that the refund claim was not time-barred as the service became taxable only from 01.07.2010, while the period in question was March 2007 to February 2009. The appellant relied on various judgments to support their argument that the time limit under Section 11B of the Central Excise Act did not apply to illegal levy situations. However, the Tribunal held that the refund of ?5,27,265 was indeed time-barred under Section 11B, citing legal precedents and clarifications on statutory time limits for refund claims.

3. The rejection of the refund claim of ?25,733 for non-production of documents was also contested. The appellant claimed that they were not given an opportunity to present the documents before the adjudicating authority due to an ex-parte order. The Tribunal acknowledged the procedural lapse and remanded the case back to the original authority for reconsideration. The appellant was directed to submit all relevant documents for a proper assessment, and the adjudicating authority was instructed to issue a reasoned order in accordance with the law.

In conclusion, the Tribunal partly allowed the appeal by remanding the case for further review. The refund claim of ?5,27,265 was rejected as time-barred, while the rejection of the refund claim of ?25,733 for non-production of documents was set aside for reevaluation.