2020 (2) TMI 1202 - AT - Service Tax

Refund of service tax - service tax was paid on exempt services which was not required to be paid - reverse charge mechanism - applicability of time limitation u/s 11B of the Central Excise Act, 1944 - HELD THAT - The appellant was not liable to pay service tax on transportation of rice as same was exempt from payment of service tax as per Notification No. 25/2012-ST dated 20 June 2012 in terms of Section 66 (4) of Finance Act, 1994. Reliance placed in the case of M/S HITACHI METALS (INDIA) PVT. LTD. VERSUS CCE ST- GURGAON-I, GURGAON 2019 (6) TMI 1320 - CESTAT CHANDIGARH where on identical issue, it was held that the time-limit prescribed under Section 11B of the Central Excise Act, 1944 for filing the refund claim is not applicable to the facts of this case. The time limit prescribed under Section 11B of the Central Excise Act, 1944 is not applicable to the facts of this case and the refund claim is filed in time - appeal allowed - decided in favor of appellant.

Summary

Issues:
Refund claim rejection as time-barred under Section 11B of the Central Excise Act, 1944.

Analysis:
The appellant filed a refund claim after realizing that the transportation of rice, for which they paid service tax under reverse charge mechanism, was exempt from tax. Both authorities rejected the refund claim as time-barred under Section 11B of the Central Excise Act, 1944. The appellant contended that the refund claim was not time-barred as they were not liable to pay service tax on transportation of rice, citing a precedent involving Hitachi Metals (I) Pvt. Ltd. The Revenue, however, supported the findings of the impugned order.

Upon examination, the Tribunal found that the appellant was indeed not liable to pay service tax on the transportation of rice as per a specific notification. Referring to the Hitachi Metals case, the Tribunal held that the time limit under Section 11B does not apply when the appellant is not liable to pay the tax. Citing a judgment by the Hon'ble High Court of Delhi in the case of National Institute of Public Finance & Policy, the Tribunal emphasized that the time limit does not apply in cases where the levy never applied, as conceded by the authorities. Consequently, the Tribunal set aside the impugned order, allowing the appeal with consequential relief.

In conclusion, the Tribunal held that the time limit under Section 11B of the Central Excise Act, 1944 does not apply when the appellant is not liable to pay the tax, and thus, the refund claim was not time-barred. The impugned order was set aside, and the appeal was allowed with consequential relief.