2021 (12) TMI 622 - AT - Service Tax

Refund of service tax - refund rejected on the ground of time limitation - HELD THAT - The decision of the Hon ble jurisdictional High Court of Judicature at Madras in the case of M/S. 3E INFOTECH VERSUS CUSTOMS, EXCISE SERVICE TAX APPELLATE TRIBUNAL, COMMISSIONER OF CENTRAL EXCISE (APPEALS-I) 2018 (7) TMI 276 - MADRAS HIGH COURT is binding, wherein it was held that when service tax is paid by mistake a claim for refund cannot be barred by limitation, merely because the period of limitation under Section 11B had expired. The rejection of refund is unsustainable - Appeal allowed - decided in favor of appellant.

Summary

Issues:
Whether the Revenue was justified in rejecting the refund claim of the appellant as time-barred?

Analysis:
The appellant had taken on lease the maintenance of toilets at the Central Bus Stand and the New Bus Stand at Tirunelveli. The Tirunelveli Municipal Corporation collected Service Tax from the appellant for these services. The appellant approached the Corporation for a refund of the inadvertently collected Service Tax. The Corporation filed a refund claim for the amount collected. However, a Show Cause Notice was issued to the appellant proposing to reject the refund claim as time-barred. The refund claim was rejected as time-barred by the Refund Order. The appellant then filed an appeal before the Commissioner of G.S.T. and Central Excise, who also rejected the appeal, upholding the rejection of the refund. The appellant challenged this decision in the present appeal.

During the hearing, it was argued whether the Revenue was justified in rejecting the refund claim of the appellant as time-barred. The Tribunal considered the decisions and rulings referred to during the arguments and noted conflicting decisions of higher fora on the issue. The Tribunal found a decision of the Hon'ble jurisdictional High Court of Judicature at Madras, which held that a claim for refund cannot be barred by limitation if service tax is paid by mistake. The Court emphasized that allowing the Revenue to keep excess service tax paid would be against the Constitution. Therefore, the Tribunal held that the rejection of the refund was unsustainable based on the High Court decision.

In conclusion, the Tribunal set aside the impugned order of the First Appellate Authority, allowing the appeal with consequential benefits as per the law. The decision was made based on the binding precedent set by the Hon'ble jurisdictional High Court of Judicature at Madras, emphasizing that a claim for refund cannot be time-barred if service tax is paid by mistake.