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2018 (5) TMI 920 - AT - Service TaxRefund of service tax - rejection on the ground of time limitation - the service tax was deposited by the appellant without collecting from the service recipient - Circular No. 108/02/2009 dt. 09/01/2009 - Held that - the decision of the Bombay High Court in the case of In House Products 2017 (8) TMI 521 - BOMBAY HIGH COURT is squarely applicable in the present case because the service tax was paid under the wrong belief and then the Board had clarified the same and within four months from the circular, the refund claim was filed which is within the period of one year from the circular. If the refund was claimed beyond one year from the date of circular, then the limitation would have been applicable. The decision of the Punjab & Haryana High court in the case of Sarita Handa Exports (P) Ltd. 2010 (9) TMI 254 - PUNJAB AND HARYANA HIGH COURT is not applicable in the facts and circumstances of the case because in the present case, the limitation as held by the Bombay High Court would start from the day when the circular was issued clarifying that the appellants are not liable to pay service tax. Since the refund has been rejected on time bar and it is held that the refund is within period of limitation, the case is remanded back to the original authority to reconsider the refund claim of the appellant holding it within limitation and decide the same on merit - appeal allowed by way of remand.
Issues:
- Refund of service tax - Time limitation for filing refund claim Refund of service tax: The appellant, a partnership firm engaged in construction and sale of residential apartments, paid service tax on construction-related advances from buyers. Subsequently, a circular clarified that builders are not liable for service tax on flats sold to consumers directly. The appellant filed a refund claim of &8377; 76,64,734/- on 01/05/2009. The Assistant Commissioner rejected part of the refund claim on the ground of time limitation. The Commissioner(Appeals) partially allowed the appeal, granting a refund of &8377; 39,65,384/- and rejecting the balance amount of &8377; 36,69,348/- as time-barred. The appellant challenged this decision, arguing that the refund claim was within the limitation period as per Section 11B of the CEA, 1944, and relied on judicial precedents supporting refund claims based on mutual mistakes between the assessee and the department. Time limitation for filing refund claim: The appellant contended that the rejection of the refund claim as time-barred was unjustified, citing judicial precedents such as the decision of the Bombay High Court in In House Productions Ltd. Vs. CST, Mumbai, and the Supreme Court's ruling in Sunrays Engineers Pvt. Ltd. vs. CCE, Jaipur. These cases emphasized that the limitation period for filing refund claims should be calculated from the date of clarification by the relevant authority regarding the applicability of tax. The Tribunal concurred with the appellant's argument, stating that the refund claim filed within one year of the circular clarifying the non-liability of service tax was within the limitation period. The Tribunal set aside the impugned order, remanding the case back to the original authority for reconsideration of the refund claim within the limitation period and on merit, following the principles established in the cited judicial decisions. (Order was pronounced in Open Court on 16/04/2018)
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