2018 (10) TMI 704 - AT - Service Tax

Refund of service tax paid - Chit Fund Foreman Service - refund claimed as no service tax was chargeable on the services rendered by the foreman in a business of chit fund as held by High Court of Delhi in the case of Delhi Chit Fund Association Vs. U.O.I. 2013 (4) TMI 630 - DELHI HIGH COURT - rejection of refund claim on the ground of limitation. Held that - From a conjoint reading of Section 73A and Section 11B, it is clear that as per Section 11B, an application for refund shall be made before the expiry of one year from the relevant date in such form and manner as prescribed and from a reading of the above Sections it is also clear that Section 73A talks of deposit of Revenue into Government account alone whereas Section 11B deals with claim for refund of duty paid, if any - the refund claim made by an assessee, if found in order, has to be entertained only on an application in terms of Section 11B alone and therefore, an assessee claiming refund has to pass through the tests prescribed under Section 11B. A duty would become refundable as a consequence of judgement, etc., implying that such judgement, etc., should only be in the assessee s case and not in any other case. The refund of the same was claimed because of the classification made by the Department, by virtue of which the service involved became a non-taxable entity - A perusal of the Refund Request View dated 03.08.2016 filed by the appellant makes it abundantly clear that the said application for refund was made invoking Section 11B of the Act ibid., and therefore when this provision is invoked, the same applies with full force including the rule of limitation prescribed therein. There has been a delay of more than two years and it only points out that it is clearly an afterthought, to claim the benefit of a judgement that such an application for refund was made; and on perusal of the appeal records, it is found that the assessee has nowhere whispered any reasons as to such an inordinate delay in making its application for refund. Appeal dismissed - decided against appellant.

Summary

Issues Involved:
Refusal of refund of service tax by the assessee, applicability of Section 11B of the Central Excise Act, 1944, interpretation of Section 73A of the Finance Act, 1994, relevance of judgments in similar cases, impact of limitation period on refund claims, distinction between voluntary payment and unjust enrichment.

Detailed Analysis:

1. Refusal of Refund:
The appeal was filed by the assessee challenging the denial of a refund of service tax amounting to ?3,04,983. The appellant provided Chit Fund Foreman Service and paid service tax for a specific period. The claim for refund was based on a decision of the Hon'ble High Court of Delhi in a related case, which held that no service tax was chargeable on services rendered by a foreman in a chit fund business. The refund claim was rejected by the adjudicating authority on the grounds of limitation.

2. Applicability of Section 11B:
The Ld. Consultant argued that the limitation under Section 11B should not apply as it was not a case of unjust enrichment. However, the Ld. DR contended that any refund must be considered under Section 11B alone, and since the time limit prescribed had expired, the lower authorities' actions were justified. The discussion highlighted the necessity of complying with Section 11B for refund claims.

3. Interpretation of Section 73A:
Section 73A of the Finance Act, 1994, was analyzed to understand the process of depositing service tax collected in excess with the Central Government and the subsequent adjustment or refund. It was clarified that Section 73A primarily deals with depositing revenue, while Section 11B governs refund claims. The judgment emphasized the specific roles of each section and the requirement of making a refund application under Section 11B.

4. Impact of Judgments and Limitation Period:
The judgment referred to various decisions and legal provisions to emphasize that a refund claim must adhere to the conditions specified under Section 11B. The delay of over two years in filing the refund application was viewed as an afterthought, and the rule of limitation under Section 11B was deemed applicable, leading to the dismissal of the appeal.

In conclusion, the judgment upheld the decision to reject the refund claim, citing the failure to meet the requirements of Section 11B and the significant delay in filing the application. The detailed analysis of the legal provisions and precedents highlighted the importance of following the prescribed procedures for refund claims and the implications of the limitation period on such claims.