2019 (6) TMI 201 - AT - Service Tax

Refund claim - amount was paid under mistake of Law - HELD THAT - By the time the appellants pay the service tax for the period April 2005 to September 2005 i.e. 29.05.2006, notification No. 6/2005-ST came into existence and the appellants could have avoided the payment by saying that they are eligible for the benefit of notification. Or else, the appellants could have filed refund claim within a period of one year i.e. on or before 29.05.2007 on the ground that they have paid the service tax by mistake. Instead of these two options, filing of refund claim on 29.12.2007 on the ground that the amount was paid by mistake of law is not correct. The said findings of first appellate authority are correct and legal and does not require any interference - refund cannot be allowed - appeal dismissed - decided against appellant.

Summary

Issues:
Refund of service tax amount under mistake of law.

Analysis:
The appeal was directed against Order-in-Appeal No. 30/2009 regarding the refund of an amount paid under a mistake of law amounting to ?37,400. The appellant, an authorized service station for 'Honda' two-wheelers, claimed eligibility for a small scale service provider exemption notification to receive the refund. The first appellate authority found that the appellants were not eligible for the benefit of the notification as they exclusively serviced Honda two-wheelers under the 'Honda' brand name. The authority noted that the appellants had paid the tax liability for the relevant period subsequently, and the payment could not be considered a mistake of law by the department. The authority further highlighted that the appellants had options to avoid payment by claiming eligibility for the notification or filing a refund claim within the specified period. However, the appellants filed the refund claim on a later date, which was deemed incorrect. The authority rejected the refund claim based on both merit and limitation clause.

The Tribunal concurred with the findings of the first appellate authority, stating that the appellant's activity as an authorized service station exclusively for Honda two-wheelers did not qualify for the small scale service provider exemption notification. The Tribunal found the findings to be correct and legal, requiring no interference. Consequently, the appeal was rejected, and the refund claim was not upheld.