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2017 (9) TMI 1324 - AT - Service TaxRefund claim - GTA srevice - reverse charge mechanism - N/N. 03/2013-ST dated 01/03/2013 - rejection on the ground of time limitation - Section 11B of the Central Excise Act, 1944 - whether the tax collected by the revenue without the authority of law, can be retained by them and the limitation under section 11B would apply? Held that - the Hon ble Supreme Court in the case of Mafatlal Industries 1996 (12) TMI 50 - SUPREME COURT OF INDIA held that any and every claim for refund of excise duty can be made only under and in accordance with Rule 11 or section 11B as the case may be - if the amount is not duty or tax at all, the provisions of section 11B would not apply. In the present case, there is no dispute that the amount claimed as refund is not tax and therefore, it cannot be governed by section 11B of the Act. The amount of refund as claimed by the appellant had lost its identity of Service Tax and cannot be rejected as barred by limitation. Hence, the appellant is entitled to refund of the amount as claimed by them and the impugned orders cannot be sustained. Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Rejection of refund claims as time-barred under Section 11B of the Central Excise Act, 1944. 2. Eligibility for refund of Service Tax paid under the Reverse Charge Mechanism for Goods Transport Agency service. 3. Applicability of Section 11B limitation period to refunds of amounts collected without authority of law. Detailed Analysis: Rejection of Refund Claims as Time-Barred under Section 11B: The appellant's refund claims were rejected by the Adjudicating Authority and upheld by the Commissioner (Appeals) on the grounds that they were time-barred under Section 11B of the Central Excise Act, 1944. The appellant argued that the collection of Service Tax was without the authority of law, and hence, the refund should not be barred by the limitation period prescribed under Section 11B. Eligibility for Refund of Service Tax: The appellant paid Service Tax under the Reverse Charge Mechanism for Goods Transport Agency service for the transportation of foodstuff (Biscuits), which had been exempted from the levy of Service Tax from 01/04/2013, as per Notification No.03/2013-ST dated 01/03/2013. The Adjudicating Authority acknowledged the appellant's eligibility for a refund but rejected the claim due to the limitation period. Applicability of Section 11B Limitation Period: The appellant cited several judicial decisions to support their claim that the limitation period under Section 11B should not apply when the tax collected is without the authority of law. Key cases cited include: - Geojit BNP Paribas Financial Services Ltd. vs. CCE, Customs & Service Tax, Kochi: The Kerala High Court observed that if the payment has no color of legality, Section 11B is not attracted. - Natraj & Venkat Associates vs. ACST: The Madras High Court held that if the amount paid cannot be considered as duty, the limitation under Section 11B does not apply. - Indian Oil Corporation vs. CCE: The Punjab & Haryana High Court ruled that if no duty was liable, the refund application cannot be rejected as time-barred. - KVR Construction vs. Commissioner of Central Excise (Appeals), Bangalore: The Karnataka High Court concluded that amounts paid under a mistaken notion as service tax were not actually service tax but deposits, hence Section 11B's limitation period does not apply. The Tribunal also referred to its previous judgments, including Monnet International Ltd. vs. Commr. of Central Excise, New Delhi, where it was held that the amount deposited by mistake cannot be termed as tax, and thus, Section 11B's limitation period is not applicable. Conclusion: The Tribunal concluded that the amount claimed as a refund by the appellant was not tax and therefore could not be governed by Section 11B of the Central Excise Act, 1944. The Tribunal set aside the impugned orders and allowed the appeals, directing the jurisdictional Commissioner to return the deposited amount as per law. Pronouncement: The judgment was pronounced in court on 25.08.2017.
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