2023 (9) TMI 1009 - AT - Service Tax

Refund of service tax paid by mistake - applicability of time limitation - Scope of SCN - HELD THAT - The Hon ble Karnataka High Court in the case of COMMISSIONER VERSUS KVR CONSTRUCTION 2011 (7) TMI 1334 - SC ORDER have held that no limitation is applicable for refund of tax paid under mistake. Further, the Larger Bench of this Tribunal has held that under such facts and circumstances, where tax is paid by mistake, no limitation is applicable. Further, admittedly, it is the appellant, who has borne the tax. Admittedly, the appellant have paid the part of tax by challan and part of the tax has been deducted by the Rajasthan Housing Board from their bills, and deposited under RCM. Accordingly, the appellant is entitled to the refund under dispute. Scope of SCN - HELD THAT - The Commissioner (Appeals) have erred in travelling beyond the scope of show cause notice by observing that RHB may have availed the cenvat credit and further observing that the appellant have not challenged self-assessment, at any point of time and further, where the tax is paid under mistake and the same has been accepted by the Revenue, there is no question of filing appeal against such self-assessment. Moreover, the Revenue have entertained the claim of appellant and adjudicated the same on merits. The impugned order is set aside. The Adjudicating Authority is directed to disburse the refund within a period of 45 days from the date of receipt of copy of this order along with interest as per rules - Appeal allowed.

Summary

Issues involved:
The judgment addresses the rejection of a refund claim by the appellant based on the grounds of limitation and unjust enrichment.

Details of the judgment:

Issue of Refund Claim Rejection:
The appellant constructed residential houses for EWS and LIG societies as per work orders from Rajasthan Housing Board (RHB) and mistakenly deposited service tax. The appellant claimed a refund of both portions of the service tax deposited, citing exemption under Notification No. 25/2012-ST and that they had borne the tax incidence. Both lower authorities rejected the refund on limitation and unjust enrichment grounds. The appellant filed the refund claim in October 2021, but a show cause notice was issued in December 2021 proposing to reject the claim. The claim was rejected on the grounds of unjust enrichment and limitation.

Appeal Process:
The appellant appealed before the Commissioner (Appeals), who upheld the rejection of the refund claim. The appellant then approached the Tribunal challenging the decision.

Arguments and Rulings:
The appellant argued that they had borne the tax incidence as per work orders and cited relevant case laws to support their claim. The Tribunal referred to previous rulings and held that the appellant was entitled to the refund as they had borne the tax. The Tribunal also noted that the Commissioner (Appeals) erred in considering aspects beyond the show cause notice.

Decision and Conclusion:
The Tribunal allowed the appeal, setting aside the impugned order. The Adjudicating Authority was directed to disburse the refund within 45 days along with interest. The Tribunal emphasized that where tax is paid under mistake and accepted by the Revenue, there is no need to appeal against such self-assessment. The judgment highlighted the appellant's entitlement to the refund under the circumstances presented.

Separate Judgment:
A separate judgment was not delivered by the judges in this case.