2021 (8) TMI 298 - AT - Service Tax

Refund of service tax paid - chit fund business - tax on foreman charges collected for chit fund activities - whether such service was liable to be tax or not - delay of four days in filing refund claim - period from 01.07.2012 to 31.05.2013 - Time limitation - HELD THAT - It is the settled position of law that any judgement of the Hon ble Supreme Court is the law of the land. Therefore, when the Hon ble Supreme Court holds that there was no question of liability to Service Tax, then, any amount collected under the guise of Service Tax becomes a collection of the said amount without the authority of law and the Revenue can never, therefore, claim any right over such amount; the same will have to be refunded forthwith to the concerned person. Hence, the collection of amount, which according to the appellant was out of compulsion, being a collection without any authority of law, will have to be refunded. There is no doubt that Section 11B ibid. prescribes the period of limitation for filing the refund claim, but admittedly here, the application for refund was filed on 19.01.2018; the date of the judgement of the Hon ble Supreme Court is 07.01.2014. There is a clear four-year delay in filing the refund claim - the appellant cannot take advantage of its own mistake of filing a delayed refund claim and thus cannot claim the interest for that delayed period during which time it slept over its rights. The matter is restored to the file of the Original Authority, who shall work out the refund - Appeal allowed.

Summary

Issues:
Refund claim rejection based on limitation under Section 11B of the Central Excise Act, 1944.

Analysis:
The appellant, engaged in chit fund business, claimed a refund of Service Tax on foreman charges collected during a specific period. The appellant relied on a judgment by the Hon'ble Supreme Court, which held that Service Tax was not chargeable on such services, leading to the refund claim. However, the Adjudicating Authority rejected the claim citing limitation under Section 11B. The First Appellate Authority upheld this decision, prompting the appeal.

The Member (Judicial) noted that judgments of the Hon'ble Supreme Court are binding, establishing that any collection made without legal authority must be refunded. As the Service Tax collection was deemed unauthorized post the Supreme Court ruling, the Revenue had no right over the amount collected. Consequently, the lower authorities' decisions were deemed meritless and set aside.

While acknowledging the limitation period under Section 11B for refund claims, the Member highlighted a four-year delay in filing the refund application post the Supreme Court judgment. The appellant's delay was considered their own mistake, leading to a denial of interest for the delay period. The appellant was deemed ineligible to benefit from interest due to their delayed claim, as it was viewed as neglecting their rights during that period.

The Member directed the Original Authority to calculate the refund amount and any consequential benefits based on the observations made. The appeal was allowed with specific directions, emphasizing the restoration of the matter to the Original Authority for the calculation and processing of the refund as per the judgment's directives.