2022 (12) TMI 658 - AT - Service Tax

Refund of service tax - Period of limitation - Invoice Raised in service tax paid prior to introduction of GST - Service was not complete and GST was paid after completion of services post intorduction of GST w.e.f. 1.7.2017 - HELD THAT - In the present case the date of approval of invoice was agreed to be considered as date of invoice. The said approval was awaited till 01.07.2017 when CGST Act comes into effect. It is, hence, clear that the service was not completed till the new law was given effect to. In fact, the period of one year, even if, calculated from the date of the impugned unapproved invoice had not expired by 1st July, 2017 i.e. till coming into effect of GST Act. Section 11B of erstwhile Central Excise Act has wrongly been invoked by the Commissioner (Appeals). He is observed to have miserably failed to observe the transition provisions and the mandate of the new CGST law that the entitlement of the assessee have mandatorily to be returned/refunded to the assessee irrespective of any limitation of time, though in cash. Following the decision in the case of Punjab National Bank Vs. Commissioner of CGST and Central Excise, Jaipur 2022 (5) TMI 652 - CESTAT NEW DELHI , refund allowed.

Summary

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

Analysis:
The appellant, engaged in "Consulting Engineer Services," filed a refund claim for service tax of Rs.4,99,800, which was proposed to be rejected due to not filing within the prescribed time period. The initial rejection was confirmed in the Order-in-Original, followed by dismissal in the Order-in-Appeal, leading to the appeal before the Tribunal.

The appellant's argument centered around the delayed approval of the invoice, leading to the service tax payment before the invoice approval. The appellant contended that the refund claim was wrongly rejected as time-barred, citing Circular No. 144/2011-ST and Section 142(5) of the Goods and Service Tax Act, 2017, emphasizing no time limit for refunds post-GST implementation.

The Departmental Representative (DR) countered by emphasizing the Commissioner (Appeals) findings, citing adherence to the limitation period under the Central Excise Act. The DR argued for dismissal of the appeal, asserting no infirmity in the impugned order.

The Tribunal observed that the duty related to the invoice was discharged, focusing on whether Section 11B's time limitation applied to the circumstances. Notably, the service was not considered completed before the GST Act's implementation, as per the Circular's interpretation of "completion of service."

The Tribunal further analyzed Section 142(5) of the GST Act, applying it to the case and concluding that invoking Section 11B was incorrect. The Tribunal referenced a prior decision to support the view that no time limit for refund exists under Section 142 in cases without controversy over the refundable amount or unjust enrichment allegations.

Consequently, the Tribunal set aside the order invoking Section 11B's time bar, allowing the appeal and directing the refund to the appellant.

This detailed analysis highlights the key arguments, legal interpretations, and the Tribunal's decision in the case concerning the rejection of a refund claim based on time limitation under the Central Excise Act, 1944.