2023 (10) TMI 502 - AT - Service Tax

Refund of Service Tax - time limitation - claim in accordance with Section 11B of the Central Excise Act, 1944 or not - HELD THAT - The refund application was filed as early as in March i.e., 18.03.2011, sent by registered post and the Revenue now cannot dispute the same since, apparently, the same was returned for re-submission after pointing out mistakes in the said application. The appellant had thereafter vide letter dated 31.03.2011 re-submitted the refund claim. The Hon ble Gujarat High Court in APAR INDUSTRIES (POLYMER DIVISION) VERSUS UNION OF INDIA 2015 (12) TMI 1255 - GUJARAT HIGH COURT has held in the above case that the time-limitation under Section 11B is to be reckoned from the date of original application for refund, which is 18.03.2011 in the case on hand. Further, it has been held that when the petitioner re-presented such rebate applications in correct form, backed by necessary documents, the same should have been seen as a continuous attempt on part of the petitioner to seek rebate. Thus seen, it would relate back to the original filing of the rebate applications, though in wrong format. Admittedly, the date of the original refund claim is within one year as stipulated under Section 11B ibid. The Department has accepted the said decision of the Hon ble Gujarat High Court vide Circular No. 1063/2/2018-CX dated 16.02.2018, by which act the said judgement of the Hon ble Gujarat High Court has attained finality and so has the decision therein. The time-limitation for refund application under Section 11B in the case on hand is to be reckoned from the date of original filing of such application. Hence, the issue of time-bar does not arise in the case on hand and to this extent, therefore, the impugned order cannot sustain. Section 11B refers to any person and admittedly, the appellant before us is the person who has borne the incidence of tax and hence, any person appearing in the said section clearly covers the appellant as well. This is also for the reason that, as admitted by the builder, the builder had only remitted the tax portion paid by the appellant to the Department, and as admitted by his certificate, as having included the tax portion in the consideration received - the appellant was very much within her right to have claimed the impugned refund and further that she was also entitled for the same. If the construction is for the self-use of the builder, then perhaps there may not be any liability on its part to pay Service Tax, but still the Revenue consciously accepted such payment just to deny the refund to the appellant. Hence, the denial, as made by the adjudicating authority, which was subsequently upheld, is unsustainable for the reason that the same is without any basis, for which reason the impugned order is set aside. The appeal is allowed.

Summary

Issues involved:
The issue to be decided is whether the appellant's claim for refund of Service Tax is proper and correct.

Summary:

Issue 1: Refund of Service Tax
The appellant filed a refund claim for Service Tax paid on a flat purchased for personal use. The Department contended that the residential complex was subject to Service Tax as it was constructed by the developer for commercial purposes. The appellant argued that the flat was for personal use and thus, entitled to a refund. The Revenue issued a Show Cause Notice rejecting the refund claim on various grounds, including time-bar and the nature of the construction project. The original authority and the Commissioner (Appeals) rejected the claim, leading to the current appeal.

Decision:
The Tribunal allowed the appeal, holding that the appellant was entitled to the refund as she had borne the incidence of taxation. The Tribunal found the denial of the refund without basis and set aside the impugned order. The time-limitation for the refund application was deemed to be from the date of the original filing, as per Section 11B. The consistent view of co-ordinate Benches supported the appellant's claim, and the denial of the refund was deemed unsustainable.

Significant Points:
- The appellant's claim for refund was based on personal use of the purchased flat.
- The Department contended that the construction project was subject to Service Tax.
- The Show Cause Notice raised issues of time-bar and the nature of the construction project.
- The original authority and the Commissioner (Appeals) rejected the refund claim.
- The Tribunal allowed the appeal, emphasizing the appellant's right to claim the refund.
- The time-limitation for the refund application was determined from the date of the original filing.
- The denial of the refund was deemed baseless, and the impugned order was set aside.

Conclusion:
The Tribunal allowed the appeal, granting the appellant consequential benefits as per law.