2023 (10) TMI 57 - AT - Service Tax

Refund of service tax paid in excess - refund claim was rejected on the ground of limitation prescribed under Section 11B of Central Excise Act, 1944 - HELD THAT - It is found that on applying Section 11B of the Central Excise Act to the refund claims, a portion of the refund claims be time barred; however, the claim of the appellant relating to the tax amount paid on 29.06.2017 may not be hit by limitation prescribed under Section 11B. Also, there is an argument on merit relating to Point of Taxation Rules. Both sides fairly concede that the matter may be remanded for verification of the claim to the extent of payment made on 29.06.2017 and also on merit. The adjudicating authority to decide the same afresh. The impugned order is set aside and the appeal is remanded to the adjudicating authority to decide the issue on merit and on limitation relating to the refund claims pertaining only to the period 29.06.2017 as for the earlier period, it is hit by limitation. Appeal allowed by way of remand.

Summary

Issues:
The appeal involves a refund claim for service tax paid in excess for Technical testing and analysis services during a specific period. The main issues are the applicability of limitation under Section 11B of the Central Excise Act, 1944 and the merit of the refund claim.

Limitation Issue:
The appellant filed a refund claim for service tax paid in excess during the period October 2015 to June 2017, on the grounds that services were not rendered during that time. However, the refund claim was rejected based on limitation prescribed under Section 11B of the Central Excise Act, 1944. The appellant contended that the amount paid was a deposit and refundable, citing a relevant judgment. The Revenue argued that the refund claim filed on 29.06.2018 was time-barred, but admitted the need for scrutiny regarding the service tax payments made on 29.06.2017. The Tribunal found that while a portion of the refund claims may be time-barred, the claim related to the tax amount paid on 29.06.2017 might not be subject to limitation under Section 11B. The matter was remanded to the adjudicating authority for further verification on this issue.

Merit Issue:
The appellant argued on merit that since services were not rendered during the service tax regime but after the introduction of GST, the refund should be granted. The Revenue contended that the appellant correctly discharged service tax as per the Point of Taxation Rules, 2011. Both sides agreed that the matter should be examined afresh on merit, particularly regarding the Point of Taxation Rules. The Tribunal remanded the appeal to the adjudicating authority to decide the issue on merit and limitation specifically for the refund claims pertaining to the period 29.06.2017, as the earlier period was found to be time-barred. Principles of natural justice were directed to be observed in the adjudication process.