2019 (4) TMI 443 - AT - Service Tax

Refund of erroneous tax paid - renting of immovable property being residential premises for use as residence - period from April, 2012 to June, 2014 - refund rejected on the ground that it being filed beyond the statutory period of one year i.e. on 07.01.2016 - time limitation - Held that - In view of Section 83 of the Finance Act, 1994, Section 11B of the Central Excise Act, 1944 and its ancillary provisions are applicable to service tax matters. The leading case of Mafatlal Industries 1996 (12) TMI 50 - SUPREME COURT OF INDIA governs the rule of refund as contemplated in Section 11B of the Central Excise Act, 1944 - In view of the binding president of the judgment of the Hon ble Supreme Court in Mafatlal Industries case, except where unconstitutionality of a provision under the levy was created, no refund is admissible if filed beyond the prescribed limit stipulated in Section 11B of the Central Excise Act, 1944. Appeal dismissed.

Summary

Issues:
Refund claim rejection based on exceeding statutory time limit under Section 11B of the Central Excise Act, 1944 for service tax paid under a mistake of law.

Analysis:
The appeal centered around a refund claim amounting to &8377; 5,17,749/- for service tax erroneously paid for the period from April, 2012 to June, 2014, which was rejected due to being filed beyond the one-year statutory period as per Section 11B of the Central Excise Act, 1944. The appellant had initially paid the service tax but later realized it was not leviable, leading to a refund to the tenant and a subsequent refund claim that was rejected. The appellant argued that the limitation under Section 11B should not apply to refund claims for service tax paid under a mistake of law, citing relevant judgments. The respondent-department, however, relied on a decision by the Larger Bench of CESTAT, Chandigarh, emphasizing that the time limit under Section 11B governs all refund claims.

During the hearing, the appellant's counsel referenced specific judgments to support the contention that the limitation under Section 11B should not be applicable to refund claims arising from a mistake of law. On the other hand, the respondent-department argued that the decision by the Larger Bench of CESTAT established the applicability of the time limit under Section 11B to all refund claims. The Tribunal considered the arguments from both sides along with relevant legal provisions and precedents.

The Tribunal examined the applicability of Section 11B of the Central Excise Act, 1944 to service tax matters, emphasizing the rule of refund as established in the leading case of Mafatlal Industries. Citing a significant observation from a nine-member Bench of the Supreme Court in the Mafatlal Industries case, it was highlighted that, except in cases of unconstitutionality of a levy provision, no refund is permissible if filed beyond the prescribed limit in Section 11B. The Tribunal, therefore, upheld the rejection of the refund claim based on the statutory time limit, as per the binding precedent set by the Supreme Court's judgment in the Mafatlal Industries case.

In the final order, the Tribunal dismissed the appeal and confirmed the decision of the Commissioner of CGST & Central Excise, Raigad Commissionerate to reject the refund claim, as it was filed after the statutory period specified under Section 11B of the Central Excise Act, 1944. The order was pronounced in court on 03.04.2019.