2018 (4) TMI 1328 - AT - Service Tax

Refund of service tax paid under reverse charge mechanism - time limitation u/s 11B of the CEA 1944 - case of assessee-appellant is that it was under no statutory obligation to pay service tax on the manpower recruitment and supply agency service and that since the said amount was deposited inadvertently, the same should be refunded by the department, without insisting for the time-limit - Held that - It is an admitted fact on record that the said refund application was filed by the assessee-appellant and entertained by the department under Section 11B and Central Excise Act, 1944, made applicable to Section 83 of the Finance Act, 1994. Since the said statutory provision mandates that refund claim has to be filed within one year from the relevant date (i.e. from the date of payment of service tax amount), the statutory authorities cannot interpret the language of the statute otherwise, in order to decide the issue differently. It is evident from the terms and conditions provided in the work order that the contractor was not providing any manpower recruitment and supply agency service . Therefore, the assessee-appellant, in the capacity of recipient of services, will not be liable to pay service taxon reverse charge mechanism on such category of service provided by the contractor. Appeal dismissed - decided against appellant.

Summary

Issues:
Refund of service tax under reverse charge mechanism, Time limitation for filing refund claim, Classification of services under 'manpower recruitment and supply agency service'.

Refund of service tax under reverse charge mechanism:
The appellant filed a refund application claiming refund of service tax paid under reverse charge mechanism. The original authority rejected the application stating the appellant was liable to pay service tax under reverse charge for manpower recruitment and supply agency service. The Commissioner (Appeals) upheld the rejection on the ground of limitation, but accepted the appeal for amounts paid after a certain date. The appellant argued it was not obliged to pay service tax and the amount was deposited inadvertently. The department contended that the services received were classifiable under 'manpower recruitment and supply agency service'.

Time limitation for filing refund claim:
The Tribunal found that the refund application was filed beyond the stipulated time limit as per Section 11B of the Central Excise Act, 1944. Citing the Veer Overseas Ltd. case, the Tribunal held that the statutory time limit cannot be extended. Referring to various judgments, it concluded that refund claims filed beyond the time limit cannot be entertained by statutory authorities, including the Tribunal.

Classification of services under 'manpower recruitment and supply agency service':
Upon reviewing the work order, the Tribunal noted that the contractor was engaged for bottling and other tasks, with penalties for failure to meet targets. It determined that the contractor was not providing 'manpower recruitment and supply agency service'. Consequently, the appellant, as the recipient of services, was not liable to pay service tax under reverse charge for such services. The Tribunal upheld the Commissioner (Appeals) decision and dismissed both appeals.

The judgment emphasizes the importance of adhering to statutory time limits for filing refund claims and highlights the need for a clear classification of services to determine tax liabilities accurately.