2023 (7) TMI 256 - AT - Service Tax

Rejection of Refund claim - rejection on the ground that the refund claim is filed beyond the period of limitation and fails to pass the bar of unjust enrichment - withdrawal under National Litigation Policy on 27.02.2016 - HELD THAT - At the time when the ld. Commissioner (Appeals) passed the order for dropping the proceedings against the appellant, the decision of the Hon ble Apex Court was not available. Therefore, the appellant was not liable to pay any service tax for the impugned period. Moreover, the appeal filed by the Revenue against the order of the ld. Commissioner (Appeals) has already been withdrawn under National Litigation Policy on 27.02.2016, thereafter, no demand is sustainable against the appellant and the amount paid by the appellant on 26.02.2011 is only a deposit. In view of this, no limitation is applicable. Further, no bar of unjust enrichment is applicable in the facts and circumstances of this case, as the appellant has also made the payment for the period from 10.09.2004 to 15.06.2005 on 26.02.2011. The appellant is entitled for refund claim and the decision in the case of M/S. TIGER LOGISTICS (INDIA) LTD. VERSUS COMMISSIONER OF SERVICE TAX-II, DELHI 2022 (2) TMI 455 - CESTAT NEW DELHI is not applicable to the facts and circumstances of the present case where it was held that In this case, once the service tax, admittedly due, has been paid, albeit late and on that basis we have accepted the plea of the appellant that section 73(3) applies and no SCN should have been issued at all, the appellant cannot claim refund of the service tax paid. This would also apply to any service tax paid beyond the period of five years. There are no merit in the impugned order and the same is set aside - appeal allowed.

Summary

Issues involved:
The appellant's refund claim was rejected by the adjudicating authority, citing reasons of limitation and unjust enrichment.

Summary:
The appellant was issued a show-cause notice demanding Service Tax, which was confirmed by an order. However, the proceedings against the appellant were dropped by the Commissioner (Appeals). The Revenue challenged this decision but later withdrew the appeal under National Litigation Policy. The appellant paid the disputed amount during the appeal and filed a refund claim, which was rejected for being beyond the limitation period and failing the unjust enrichment test. The appellant contended that the payment was made during the pendency of the appeal and therefore, the refund claim was valid. The Revenue argued that the appellant paid without protest after a decision by the Apex Court and hence, was not entitled to a refund.

After considering the submissions, it was found that at the time the Commissioner (Appeals) dropped the proceedings, the Apex Court's decision was not available. Therefore, the appellant was not liable to pay the service tax. Since the Revenue's appeal was withdrawn, no demand was sustainable against the appellant, and the payment made was considered a deposit. Thus, no limitation applied, and unjust enrichment was not applicable. The appellant's entitlement to a refund was upheld, and a previous case was deemed not applicable to the present circumstances. Consequently, the impugned order was set aside, and the appeal was allowed with consequential relief.