2021 (1) TMI 383 - AT - Service Tax

Refund of Service Tax - rejection of refund claim holding that the appellant has not contested the service tax liability, therefore, the refund claim of service tax paid is not admissible - HELD THAT - The fact which is admitted by both the sides that in the earlier round of litigation, this Tribunal passed the order and dropping the demand of service tax for extended period of limitation alongwith interest and the said order is final. In that circumstances, the refund claim filed consequent that order is admissible in the eyes of law. The refund claim alongwith interest to be paid by the department within one month from the date of receipt of this order is allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against rejection of refund claim due to extended period of limitation invokement.

Analysis:
The appellant appealed against the rejection of the refund claim by authorities due to the initiation of proceedings for non-payment of service tax under reverse charge mechanism. The appellant paid the service tax along with interest during the audit, but the department issued a show cause notice invoking the extended period of limitation. The matter was adjudicated, demands were paid, penalties imposed, and an appeal was filed before the Tribunal. The Tribunal concluded that the extended period of limitation was not invokable, leading to the appeal being allowed with consequential relief. Subsequently, the appellant filed a refund claim, which was rejected by the adjudicating authority and the Ld. Commissioner (Appeals) based on the argument that the appellant had not contested the service tax liability. The appellant contended that as the Tribunal had decided the extended period of limitation was not applicable, they were entitled to the refund. The Ld. AR argued that since the appellant had admitted the service tax liability and requested the conclusion of proceedings, the refund claim was not admissible, citing legal precedents.

The Tribunal considered both parties' submissions and noted that its previous order had settled the issue of the extended period of limitation. Therefore, the refund claim filed after that order was admissible in the eyes of the law. The Tribunal found that the decisions cited by the Ld. AR were not applicable to the current case as the previous order had become final. The Tribunal held that the observations made by the authorities below were contrary to the law as they had accepted the Tribunal's previous order. Consequently, the impugned order was set aside, and the refund claim along with interest was allowed to be paid by the department within one month from the date of the order.