2018 (12) TMI 791 - AT - Service Tax

Refund of service tax paid erroneously - information technology software services - refund claim denied on the ground of limitation - applicability of Section 11B of the Central Excise Act - Held that - Hon ble Supreme Court s decision in the case of Porcelain Electrical Mfg. Co. v. Collector of C.Ex., New Delhi 1994 (11) TMI 145 - SUPREME COURT OF INDIA , vide which the Hon ble Supreme Court rejected the assessee s stand that since the duty has been paid under mistake of law, the period of limitation applicable would be three years. Admittedly the refund claims having been filed after normal period of limitation prescribed under Section 11B are required to be rejected and no infirmity can be found in the impugned orders of the authorities below. Appeal dismissed - decided against appellant.

Summary

Issues:
Refund claim denial based on limitation under Section 11B of the Central Excise Act.

Analysis:
The appellant, engaged in various services, paid Service Tax for 'information technology software services' to M/s. Yes Bank during a period when such services were not taxable. A refund claim was filed after the limitation period, leading to denial by the authorities. The main contention was that the payment was a deposit, not subject to Section 11B limitations. However, the Tribunal found this argument lacking merit. Citing legal precedents, including the Supreme Court's decision in Mafatlal Industries v. Union of India, it was established that the limitation under Section 11B applies to all refunds. The Commissioner(Appeals) and various court decisions supported this interpretation.

The Tribunal referred to the case of Karnik Meritime Pvt.Ltd. v. Commissioner of Central Excise, Mumbai and Asstt. Commissioner of Customs v. Anam Electrical Manufacturing Company to emphasize the strict application of Section 11B's limitation period. Additionally, the High Court's decision in Jumay Foam Pvt. Ltd. v. Union of India highlighted the importance of adhering to statutory time limits, especially in cases of illegal levy. The Supreme Court's ruling in Collector of C.Ex., Chandigarh vs. Doaba Co-operative Sugar Mills further reinforced the principle that authorities must abide by the statutory provisions for refunds.

Further, the Tribunal cited the High Court of Madras' decision in Commissioner of S.T., Chennai v. Natraj and Venkat Associates, which clarified that even if a tax is paid under a mistake of law, refund claims filed beyond the statutory limitation period are not tenable. The Supreme Court's decision in Porcelain Electrical Mfg. Co. v. Collector of C.Ex., New Delhi rejected the argument for an extended limitation period due to a mistake of law, emphasizing that departmental authorities are bound by the statutory time limits.

Ultimately, the Tribunal upheld the denial of the refund claim, stating that the appellant's claims were filed after the prescribed limitation period under Section 11B, in line with established legal precedents. The appeal was rejected based on the clear application of the statutory provisions regarding refund claims and limitations.