2017 (12) TMI 1495 - AT - Service Tax

Refund claim - service tax paid which is not payable - Rejection on the ground of time limitation - Section 11B of the CEA, 1944 - Held that - It is admitted fact that the appellant is service provider in the state of Jammu & Kashmir and for the services provided by the appellant in the state of Jammu & Kashmir, no service tax is payable. In that circumstance, the amount paid towards service tax by the appellant is not an amount of service tax - when it is not an amount of service tax than the provisions of Section 11B of the Act are not applicable to the facts of this case - refund allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
Refund claim rejection as time-barred under Section 11B of the Central Excise Act, 1944.

Analysis:
The appellant, a service provider in Jammu and Kashmir, mistakenly paid service tax on services where no tax was due. The service recipient later deducted the tax amount from invoices. The appellant filed a refund claim after two and a half years, which was initially sanctioned but later rejected as time-barred by the Ld. Commissioner (A) under Section 11B. The appellant appealed this decision.

The Tribunal noted that no service tax was due on the services provided by the appellant in Jammu and Kashmir. As the tax paid was not actually service tax, but an amount paid wrongly to the department, it was deemed refundable. Since it was not a service tax amount, Section 11B did not apply. Consequently, the impugned order was set aside, and the appeal was allowed with consequential relief.

In conclusion, the Tribunal overturned the rejection of the refund claim, emphasizing that the payment made by the appellant was not service tax and therefore not subject to the time limitations under Section 11B. The decision highlights the importance of understanding the nature of payments made to tax authorities and the applicability of relevant legal provisions in such cases.