2022 (9) TMI 844 - AT - Service Tax

Applicability of time limitation prescribed under section 11B of the Central Excise Act - deposit amount - exemption under Notification no. 25/2012-ST - difference of opinion - matter referred to learned 3rd Member. HELD THAT - The Third Member has expressed his opinion as follows - The limitation prescribed under section 11B of the Excise Act would not be applicable if an amount is paid under a mistaken notion as it was not required to be paid towards any duty/tax. In terms of the opinion expressed by the Learned Third Member, this appeal stands allowed in favour of the appellant assessee.

Summary

Issues:
1. Eligibility of exemption under Notification no. 25/2012-ST for the appellant.
2. Application of limitation under Section 11B for the purpose of refund.

Analysis:
1. The Division Bench agreed on the eligibility of the exemption under Notification no. 25/2012-ST for the appellant. However, there was a difference of opinion regarding the application of limitation under Section 11B for the purpose of refund. The Third Member was tasked with resolving this difference of opinion.

2. The Third Member opined that the limitation prescribed under section 11B of the Excise Act would not be applicable if an amount is paid under a mistaken notion and was not required to be paid towards any duty/tax. This opinion was based on the premise that if the tax was paid erroneously, though eligible for exemption, and is in the nature of a deposit, then the limitation under Section 11B would not be attracted. This interpretation was in contrast to the view of the Member (Technical) who held that the limitation under Section 11B is applicable, citing the ruling of the Hon'ble Supreme Court in Mafatlal Industries Vs. Union of India - 1997 (89) ELT 247.

3. Consequently, the Third Member's opinion favored the appellant assessee, leading to the appeal being allowed in favor of the appellant. As a result, the appellant assessee was granted a refund along with interest as per the rules. The impugned order was set aside, and the appeal was allowed in favor of the appellant assessee.