2018 (7) TMI 1378 - AT - Service Tax

Refund of service tax paid - VAT and service tax paid on same transactions - rejection of refund on the ground of time bar - Held that - There is no dispute about the fact that VAT and service tax are mutually exclusive levies. If VAT is paid on anything, the same would not attract service tax - However, in the present case, it is seen that the appellants have not paid VAT on the logistic charges and it is only on the basis of a proposal by the VAT Department to levy VAT on logistic charges, they have approached the Service Tax Department for refund of the service tax. In any case and any view of the matter, the refund claims stands filed after a period of one year from the relevant date in terms of Section 11B of the Act - All the refund claims are governed by the provisions of Section 11B and the time limit prescribed therein is required to be adhered to by the Revenue authorities. Tribunal being a creature of the law and working under the Act, is bound by the provisions of the Act and has no extraordinary jurisdiction to dilute the limitations prescribed under the law. Refund claim is time barred - appeal dismissed - decided against appellant.

Summary

Issues:
1. Rejection of refund claim on the grounds of time bar.
2. Applicability of Section 11B of the Central Excise Act, 1944 to service tax matters.
3. Mutually exclusive nature of VAT and service tax.
4. Adherence to time limits prescribed under the law for refund claims.

Analysis:
The judgment pertains to the rejection of a refund claim on the basis of being time-barred. The appellant, engaged in business auxiliary services, had paid service tax for the years 2012-2013 to 2014-2015. Subsequently, the VAT department demanded VAT on the same, considering it part of the sale price of motor vehicles. The appellant contested the VAT payment and simultaneously filed a refund claim of service tax, arguing that both VAT and service tax cannot be paid for the same transactions as they are mutually exclusive. The refund claim was rejected by lower authorities citing time bar issues.

The Commissioner (Appeals) upheld the rejection, emphasizing the self-contained provision of Section 11B of the Central Excise Act, 1944, governing refund claims. The Commissioner highlighted that the time taken by the court would not be excluded for such claims. The appellant's argument that since the VAT department proposed to levy VAT on logistic charges, no service tax would be payable was considered but dismissed due to the late filing of the refund claim, which was beyond the one-year limitation period specified in Section 11B.

The judgment reaffirmed the mutually exclusive nature of VAT and service tax, stating that if VAT is paid on an item, it would not attract service tax. However, in this case, the appellant had not paid VAT on logistic charges, only approaching the Service Tax Department for a refund based on a proposal by the VAT Department to levy VAT on such charges. The Tribunal concluded that the refund claims were filed after the prescribed one-year limitation period and, therefore, could not be entertained, citing various court decisions emphasizing adherence to the time limits prescribed under the law.

Ultimately, the Tribunal rejected the appeal, emphasizing that all departmental authorities are bound by the limitations prescribed under Section 11B and cannot exercise extraordinary jurisdiction beyond the statutory limitations. The judgment underscores the importance of adhering to the prescribed time limits for refund claims under the law, regardless of the merits of the case.