2021 (10) TMI 485 - AT - Service Tax

Refund of service tax - amount was paid under protest or not - time limitation - application of Section 11B(5) of the Central Excise Act, as applicable to the provisions of Service Tax - reverse charge mechanism - HELD THAT - From the facts on record and particularly the correspondence after the grant of stay by the Hon ble Madras High Court to the Association of the appellant, the fact of payment under protest is ipso facto writ large on the face of the record, in view of the series of correspondence discussed. The fact of payment under protest is also evident from the letter dated 27.09.2019 (Annexure A-8), in the appeal filed, wherein the appellant stated that they have deposited the tax in response to the repeated correspondence and had reiterated that the matter is sub-judice with regard to levy of service tax. There is no limitation applicable for the refund claimed by the appellants - the Adjudicating Authority is directed to grant refund within a period of thirty days from the date of receipt of copy of the order, alongwith interest as per rules. Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Whether the refund claim filed by the appellants regarding service tax paid is barred by limitation as per Section 11B(5) of the Central Excise Act.

Analysis:
The appellants, engaged in manufacturing and trading cotton and textile goods, were subject to service tax under the reverse charge mechanism for services received from abroad. A stay order by the Madras High Court exempted them from paying tax until a specific date. Despite subsequent demands from the Revenue and depositing the disputed service tax under protest, the appellants filed refund claims for the tax paid. The rejection of the refund claims was based on the argument that they should have followed specific notification procedures for filing refunds within a limited timeframe.

The appellants argued that the limitation period was extended to one year by Notification No. 18/2009-ST and contended that they paid the tax under protest, thus the limitation from the date of export should not apply. However, the Commissioner (Appeals) upheld the rejection of the refund claims, stating that the appellants failed to prove they deposited the tax under protest. The appellants appealed to the Tribunal, emphasizing their payment under protest and timely filing of the refund within the extended limitation period.

The Tribunal considered the correspondence following the High Court's stay order, which indicated the appellants' payment under protest. The Tribunal concluded that the limitation did not apply to the refund claims and directed the Adjudicating Authority to process the refund with interest within thirty days. The appeals were allowed, granting relief to the appellants.

In summary, the judgment addressed the issue of limitation regarding the refund claim for service tax paid by the appellants, emphasizing the payment under protest and the extended limitation period. The Tribunal ruled in favor of the appellants, directing the refund to be processed without the limitation constraint.