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2016 (12) TMI 338 - AT - Service TaxRefund claim - service tax was wrongly paid - Section 66A of the Finance Act, 1994 was introduced w.e.f. 18.04.2006 and therefore service received from outside India prior to 18.04.2006 are not liable for service tax - whether the denial of refund claim on the ground of limitation as the refund claim was filed after the stipulated time period of one year from the relevant date as provided under Section 11B of Central Excise Act, 1944, justified? - Held that - We find that the refund was sought for an amount of service tax paid by the appellant on the services received by them from the person located in the foreign country. We do agree that the service tax was not payable on such services by the appellant for the period prior to 18.04.2006, i.e. before enactment of Section 66A of the Finance Act, 1944. However the issue involved in the present case that in the case where the appellant filed the refund claim after one year from the relevant date (date of payment of service tax), whether limitation of one year as provided under Section 11B, will apply or otherwise. We find that at the time of payment even though the service tax was not payable but the appellant paid the amount as service tax only. Therefore the refund thereof is governed by the provisions of Section 11B of the Central Excise Act, 1944. The Ld. Counsel relied upon various decisions. However some of the judgments were given under the writ jurisdiction by the High Court under Articles 226 and 227. The Hon ble Supreme Court in the case of Union of India Vs. Kirloskar Pneumatic Company 1996 (5) TMI 87 - SUPREME COURT OF INDIA held that under the writ jurisdiction High Court cannot direct the customs authority to ignore the time limit prescribed under Section 27 of the Act. The refund claim filed after one year from relevant date, i.e. from the date of payment of service tax in the present case is clearly time barred. We therefore upheld the impugned order - appeal dismissed - decided against appellant-assessee.
Issues Involved
1. Whether the refund claim filed after one year from the relevant date is time-barred under Section 11B of the Central Excise Act, 1944. 2. Whether the amount paid by the appellant as service tax before 18.04.2006 can be treated as a deposit and not as service tax, thus exempting it from the limitation period under Section 11B. Detailed Analysis Issue 1: Time-Barred Refund Claim under Section 11B The appellant filed a refund claim for ?57,47,566/- on the ground that the service tax paid on services received from outside India before 18.04.2006 was not liable for service tax as per Section 66A of the Finance Act, 1994. The adjudicating authority rejected this claim citing the limitation period of one year from the relevant date as per Section 11B of the Central Excise Act, 1944. The Commissioner (Appeals) upheld this decision, leading the appellant to approach the Tribunal. The Tribunal agreed with the lower authorities, stating that the refund of any amount paid as service tax is governed by Section 11B, which includes a limitation period of one year from the relevant date. The Tribunal emphasized that even if the service tax was paid without authority of law, the refund claim must adhere to the statutory limitation period. Issue 2: Treatment of Amount as Deposit The appellant argued that the amount paid should be treated as a deposit since the service was not taxable during the relevant period, and thus, the limitation period under Section 11B should not apply. The appellant relied on various judgments to support this argument. However, the Tribunal found that at the time of payment, the amount was paid as service tax, and thus, the refund thereof is governed by Section 11B. The Tribunal referred to the Supreme Court’s judgment in the case of Kirloskar Pneumatic Company, which held that the High Court cannot direct the customs authority to ignore the time limit prescribed under Section 27 of the Act. The Tribunal noted that judgments cited by the appellant, which were passed under writ jurisdiction, could not be applied in this case. Additionally, the Tribunal referred to its previous decision in the case of M/s. Giriraj Construction, which considered various judgments on the issue of limitation and concluded that any refund claim must adhere to the limitation period prescribed under Section 11B. The Tribunal reiterated that the statutory authorities are bound by the provisions of the Act, and there is no alternative provision for refund outside Section 11B. The Tribunal also cited the Supreme Court’s judgment in Doaba Co-operative Sugar Mills, which held that even if the duty was levied without authority of law, the refund claim must adhere to the statutory limitation period. The Tribunal emphasized that accepting the appellant’s view would render Section 11B redundant, as every refund claim could then be argued to be outside the scope of the statutory limitation. Conclusion The Tribunal upheld the impugned order, dismissing the appeal filed by the appellant. The Tribunal concluded that the refund claims filed after one year from the relevant date are time-barred under Section 11B of the Central Excise Act, 1944. The amount paid by the appellant as service tax cannot be treated as a deposit to circumvent the statutory limitation period. The appeal was dismissed, and the impugned orders were upheld.
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