2025 (1) TMI 1259 - AT - Service Tax

Refund of service tax paid on Government work during the period from April 2015 to December 2015 - time limitation - rejection of refund for the reason that it had been filed beyond the period of six months prescribed under section 102 of the Finance Act - HELD THAT - Once the time limit of six months has been provided it cannot be contended that merely because the character of the tax deposit would continue to be in the nature of the tax collected without authority of law and therefore no limitation can be prescribed for filing the refund application. The learned Member failed to take into consideration the terms of sub-section (3) of the section 102 while arriving at such a conclusion. The appellant also placed reliance of the judgment of the Karnataka High Court in KVR Construction 2012 (7) TMI 22 - KARNATAKA HIGH COURT . The provisions of the section 102 of the Finance Act were not under consideration in this judgment. All that was considered was if service tax has been paid under a mistake then the time limit provided under section 11B of the Central Excise Act would not be applicable. Conclusion - The statutory time limits must be adhered to and neither the Tribunal nor the revenue authorities have the power to extend or ignore such limits. The refund claim was rightly rejected as time-barred. Appeal dismissed.

Summary

The core legal issue in this judgment revolves around the appellant's claim for a refund of service tax paid on government work, which was rejected by the authorities due to the application being filed beyond the six-month period prescribed under section 102 of the Finance Act, 1994. The Tribunal was tasked with determining whether the time limit for filing a refund claim could be extended or ignored under certain circumstances.

The relevant legal framework is section 102 of the Finance Act, 1994, which provides a special provision for exemption in certain cases relating to the construction of government buildings. Sub-section (1) of section 102 exempts service tax for specific services provided to the government during a specified period. Sub-section (2) allows for a refund of service tax collected but not due under this exemption. Importantly, sub-section (3) mandates that any refund claim must be filed within six months from the date the Finance Act, 2016, received presidential assent, which was on May 14, 2016.

The appellant argued that despite filing the refund claim beyond the six-month period, the application should be considered within a "reasonable period" due to the retrospective nature of the exemption. The appellant relied on precedents from the Tribunal in Aadhar Stumbh Township and the Karnataka High Court in KVR Construction to support their position. They contended that the refund application was filed within a reasonable time and that the statutory time limit should not bar their claim.

The Tribunal, however, rejected this argument, emphasizing that the specific time limit prescribed in sub-section (3) of section 102 is mandatory and cannot be waived or extended based on subjective interpretations of "reasonable time." The Tribunal noted that the appellant's reliance on Aadhar Stumbh Township was misplaced, as the decision did not correctly apply the provisions of section 102(3). The Tribunal further pointed out that the Madhya Pradesh High Court in MDP Infra (India) had already addressed similar arguments and upheld the statutory time limit.

The Tribunal also considered the appellant's reliance on the Karnataka High Court decision in KVR Construction, which dealt with the applicability of time limits under section 11B of the Central Excise Act when service tax was paid under a mistake. However, the Tribunal found this precedent inapplicable to the present case, as section 102 of the Finance Act was not under consideration in that judgment. The Tribunal noted that the Madhya Pradesh High Court had distinguished the Karnataka High Court's decision in MDP Infra (India).

In conclusion, the Tribunal upheld the orders of the Commissioner (Appeals) and the Assistant Commissioner, affirming that the refund claim was rightly rejected as time-barred. The Tribunal emphasized that statutory time limits must be adhered to, and neither the Tribunal nor the revenue authorities have the power to extend or ignore such limits. The appeal was dismissed, reinforcing the principle that statutory provisions regarding time limits for refund claims are binding and must be strictly followed.