2019 (3) TMI 669 - AT - Service Tax

Refund claim - time limitation - services provided by the appellant are non taxable - Held that - The issue has been examined by the Hon ble High Court in the case of National Institute of Public Finance and Policy 2018 (8) TMI 1524 - DELHI HIGH COURT , where it was held that for the refund claim of service tax which were not required to pay by the appellant, the provision of Section 11B of the Central Excise Act are not applicable. Thus, it is admitted fact that the appellant is not liable to pay service tax on the said activity. Therefore, time limit prescribed under Section 11B of the Central Excise Act,1944 is not applicable to the facts of this case. The refund claim filed by the appellant is within time - Refund allowed - appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
1. Whether the refund claim filed by the appellant is barred by limitation or not.

Analysis:
The case involved a dispute regarding the refund claim filed by the appellant, who provided construction services for flats under a government scheme. The appellant had paid service tax on the activity but later claimed that the services were non-taxable based on a court ruling. The main issue was whether the refund claim was time-barred under Section 11B of the Central Excise Act, 1944.

The appellant argued that since the services were exempt from service tax, they were entitled to claim a refund, and the limitation period under Section 11B should not apply. They cited relevant court decisions to support their contention. On the other hand, the respondent contended that all refund claims were governed by Section 11B, which required filing within one year from the date of payment of duty. The appellant had filed the refund claim beyond this period, leading to its rejection.

After hearing both parties, the tribunal considered the arguments and referred to previous court judgments. It noted a case where the court allowed a refund claim despite the lapse of the limitation period, emphasizing that when the levy never applied, the general principle of limitation should not be strictly enforced. The tribunal also cited another case where it was held that Section 11B did not apply to refund claims for services that were not required to be taxed.

Based on the precedents and the specific circumstances of the case, the tribunal concluded that the appellant was not liable to pay service tax on the activity in question. Therefore, the limitation period under Section 11B did not apply, and the refund claim was considered timely. Consequently, the tribunal set aside the earlier order rejecting the refund claim and allowed the appeal with any consequential relief.

In summary, the tribunal ruled in favor of the appellant, holding that the refund claim was not barred by limitation and should be allowed based on the non-taxable nature of the services provided.