2018 (4) TMI 668 - AT - Service Tax

Refund of service tax paid by mistake - rejection on the ground of time limitation - Held that - When it is undisputed that the respondent herein is not required to discharge any service tax law on the various services rendered by them as per Notification No. 12/2012, I find that the judgment of the Hon ble High Court of Bombay in the case of Parijat Construction 2017 (10) TMI 659 - BOMBAY HIGH COURT will apply in full force, where it was held the Division Bench of this Court in Hindustan Cocoa 1994 (6) TMI 18 - HIGH COURT OF JUDICATURE AT BOMBAY has held that the limitation prescribed under Section 11 B of the said Act to be not applicable to refund claims for service tax paid under a mistake of law - the respondent are eligible for the refund of the amount of service tax paid by mistake - appeal dismissed - decided against Revenue.

Summary

Issues:
Refund claim rejection based on limitation for service tax paid by mistake.

Analysis:
The appeal was filed by Revenue against the rejection of a refund claim by the respondent regarding service tax paid by mistake. The issue revolved around the time limitation for filing the refund claim under Section 11B of the Central Excise Act, 1944. The adjudicating authority had rejected the claim based on limitation, but the first appellate authority overturned this decision citing decisions from higher judicial forums.

The Revenue argued that the refund claim arose from the appellant's voluntary payment of service tax under works contract service related to shifting of cables and widening of public roads, which were exempted under Notification No. 12/2002-ST. The claim was filed beyond one year from the date of payment, as per Section 11B provisions, and needed to be adhered to.

On the other hand, the respondent contended that previous judgments by the Hon'ble High Court of Bombay established that when service tax is paid under a mistake of law, the limitation under Section 11B does not apply. The first appellate authority found that the appellant was not liable for service tax under the mentioned notifications and had paid it by mistake. The respondent's eligibility for the benefit of the notifications was undisputed.

Given that the respondent was not required to pay any service tax under the notifications, the judgments of the Hon'ble High Court of Bombay were deemed applicable. The first appellate authority's decision to grant the refund was upheld as correct, with no reason found to interfere with the reasoned order. Consequently, the appeal was rejected, and the cross-objection filed by the respondent in support of the impugned order was disposed of accordingly.