2018 (7) TMI 401 - AT - Service Tax

Refund of Service Tax erroneously paid - rejection on the ground of time limitation - Section 11B of CEA - Held that - Admittedly Section 11 B lays down time within which refund claim can be made by an assessee. The fact that an assessee who claims the refund leads to an inevitable conclusion that such tax/duty was not required to be paid, thus making them to claim the refund of the same - Tribunal being creator of the Act cannot go beyond the provisions of the Act and cannot adopt general limits under the limitation Act, especially when limitation stands provided under the Section 11 B of the Act - appeal dismissed - decided against appellant.

Summary

Issues:
1. Claim for refund of service tax erroneously paid
2. Rejection of refund claim on the grounds of limitation under Section 11 B

Analysis:

Issue 1: Claim for refund of service tax erroneously paid
The appellant, engaged in exporting Information Technology Software services, mistakenly paid service tax on receipts for services rendered to foreign customers. Upon realizing the error, they filed a refund claim seeking the return of the erroneously paid service tax amounting to ?9,72,458/- for the period between 01.04.2015 to 30.03.2016. The original adjudicating authority partially approved the refund within the limitation period but rejected an amount of ?4,39,686/- as time-barred. Subsequent appeals to the Commissioner (Appeals) were unsuccessful, leading to the present appeal before the Tribunal.

Issue 2: Rejection of refund claim on the grounds of limitation under Section 11 B
The appellant's main contention was that they were not liable to pay the service tax in question, and thus the amount was erroneously paid. The Revenue argued that as per Section 11 B, the time limit for claiming a refund had not been adhered to by the assessee, rendering the claim liable to rejection on the basis of being time-barred. The Tribunal, upon considering both arguments, highlighted that Section 11 B stipulates the time frame within which a refund claim can be made by an assessee. It was emphasized that when an assessee claims a refund, it inherently signifies that the tax or duty was not required to be paid, prompting the refund request. The Tribunal rejected the appellant's argument that the time limit should not apply in cases where tax was not required to be paid, stating that such an interpretation would render Section 11 B redundant. It was clarified that the Tribunal, as the creator of the Act, cannot exceed the Act's provisions and cannot impose general limitations under the Limitation Act, particularly when a specific limitation is provided under Section 11 B. The Tribunal emphasized the need to operate within the legal framework and declined to relax or condone the delay period, ultimately rejecting the appeal.

In conclusion, the Tribunal upheld the rejection of the refund claim on the grounds of limitation under Section 11 B, emphasizing the importance of adhering to statutory provisions and the prescribed time limits for refund claims, regardless of the circumstances leading to the erroneous payment of tax.