2017 (12) TMI 1312 - AT - Service Tax

Refund of service tax - time limitation - Section 11 B of the CEA, 1944 - the service tax was deposited with the jurisdictional service tax authorities at Delhi and that explaining the situation and circumstances of the case, the appellant had requested the Chief Commissioner of Delhi to transfer/ adjust the excess amount paid by it into the Chandigarh Registration Account many times, failing which, the refund application filed - Held that - The Department never responded to the letters of the appellant and also never advised the appellant for filing the proper refund application within the stipulated time frame provided under the statue. Thus, for the lapses on the part of the Department, the appellant should not be held responsible and should not be deprived of its legitimate right to claim refund of service tax as provided under the statue. The initial letter dated 30.03.2014 filed before the Chief Commissioner of Central Excise and Service Tax, requesting for transfer/ adjustment of excess paid amount into the Chandigarh Account, should be considered as the application for refund in terms of Section 11 B of the Act. Since the said application was filed within one year from the relevant date i.e. payment of Service Tax, the claim of the appellant, is not barred by limitation of time. Rejection of refund on the ground of time limitation not justified - appeal allowed - decided in favor of appellant.

Summary

Issues:
Rejection of refund claim on the ground of limitation.

Analysis:
The appellant filed a refund claim for erroneously paid service tax, amounting to ?12,48,796, on 15.07.2016, beyond one year from the relevant date. The claim was rejected under Section 11 B of the Central Excise Act, 1944, as applied to the Finance Act, 1994. The Commissioner (Appeals) upheld the rejection. The appellant argued that the refund application was filed within the stipulated time, supported by a date chart showing the sequence of events leading to the refund claim.

The appellant mistakenly paid service tax to Delhi authorities instead of Chandigarh, requesting transfer of excess amount. Despite follow-ups, no response was received from the authorities. The appellant filed a formal refund application on 15.07.2016 after the authorities did not consider the transfer request. The Tribunal noted the appellant's diligence in pursuing the matter and the lack of response or guidance from the department regarding the proper refund application timeline. The Tribunal considered the initial letter requesting transfer as the refund application, filed within one year from the relevant date of payment, thus not barred by limitation.

The Tribunal found no merit in rejecting the appeal based on limitation grounds. The order was set aside, and the appeal was allowed in favor of the appellant. The Tribunal emphasized that the appellant should not be deprived of the legitimate right to claim refund due to the department's lapses in responding and guiding on the refund process within the statutory time frame.

In conclusion, the Tribunal ruled in favor of the appellant, allowing the appeal against the rejection of the refund claim on the basis of limitation. The decision highlighted the importance of considering the circumstances and efforts made by the appellant in pursuing the refund, despite the lack of response and guidance from the tax authorities.