2017 (9) TMI 629 - AT - Service Tax

Refund claim - claim was on the ground that the services rendered by them as registrar to issues and stock transfer agent were liable to tax only w.e.f. 1.5.2006 - appellant case is that the amount was paid due to bonafide mistake and is not governed by provisions of Section 11B - time limitation - Held that - The admitted facts are that the appellants discharged the amount to the government under the category of service tax and remitted the same during the relevant time in terms of provisions of Finance Act, 1994. The amount has been paid as service tax and appropriated as part of Consolidated Fund of India by the Government. Any return of such amount should be governed by the legal provision which governs collection of such amount - In the present case, Section 11B of Central Excise Act, 1994 made applicable to the provisions of services tax is correctly invocable to determine the limitation - refund not allowed - appeal dismissed - decided against appellant.

Summary

Issues:
Claim for refund of service tax paid during a specific period.
Applicability of limitation under Section 11B.
Entitlement for refund based on merit and limitation.

Analysis:
The appeal concerns a claim for refund of service tax amounting to ?20,36,51,670 paid by the appellants between August 2003 and March 2006. The claim was filed on the grounds that the services provided were taxable only from May 1, 2006. The original authority rejected the claim citing both merit and limitation issues. On appeal, the Commissioner upheld the rejection on merit, stating that the appellants were not eligible for a refund, thus bypassing the consideration of time bar and unjust enrichment.

The appellant argued that they were eligible for a refund based on merit and limitation. They contended that the amount paid was due to a genuine misunderstanding of the law and should not be considered as service tax. The appellant cited relevant Tribunal decisions to support their case. On the other hand, the department argued that the claim was time-barred under Section 11B, emphasizing that the jurisdictional officer cannot entertain claims beyond the statutory limitation. The department also highlighted instances where High Courts allowed refunds beyond the stipulated time, but the Tribunal should adhere to statutory provisions.

Upon review, the Tribunal acknowledged the limitation issue as crucial. The claim was filed beyond the one-year period specified by Section 11B, which the appellant did not dispute. However, the Tribunal rejected the appellant's argument that the amount paid was not a tax, emphasizing that it was remitted as service tax under the Finance Act, 1994. The Tribunal clarified that Section 11B's time limit applies to tax receipts, and the appellant's argument was legally untenable. Referring to relevant case law, the Tribunal emphasized that statutory limitations must be respected, even in cases of mistaken understanding of the law.

Citing decisions from the Bombay High Court and the Madras High Court, the Tribunal reiterated that claims filed beyond the prescribed time limit cannot be entertained for a refund. Therefore, despite not delving into the merits of the claim, the Tribunal concluded that the claim could not be considered due to exceeding the statutory time limit under Section 11B. Consequently, the appeal for a refund was rejected.