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2025 (2) TMI 683 - AT - Service TaxRefund of amount paid twice towards service tax liability for the period April 2017 to June 2017 - time-barred refund claim under Section 11B of the Central Excise Act 1944 as applied to service tax by Section 83 of the Finance Act 1994 - HELD THAT - Plain reading of Section 11B of the Central Excise Act 1944 make the position very clear that the scope of Section 11B ibid deals with refund of duty/tax and duty/tax refers to the duty/tax leviable as per the provisions of the Central Excise/ Service Tax statute. If there are certain taxable services provided over a period for which the service tax payable is X and when the same has been paid firstly as per law and secondly by mistake inadvertently it is obvious that the amount paid in the context of service tax for the second time has no legal basis either for levy or for payment as service tax inasmuch as there is no taxable event for which the levy and payment would apply. The above issue has been dealt with in detail by the Co-ordinate Bench of the Tribunal in the case of Bansal Biscuits P Ltd. 2023 (11) TMI 615 - CESTAT KOLKATA wherein it was held that the limitation of time prescribed under Section 11B ibid is not applicable. The issue of payment of duty/tax for second time has also been examined by the Hon ble High Court of Gujarat in the case of Swastik Sanitary wares Limited 2012 (11) TMI 149 - GUJARAT HIGH COURT upon taking into account the judgement of the Hon ble Supreme Court in Mafatlal Industries and it was held the assessee is eligible for refund of the amount paid for the second time. Conclusion - i) The limitation prescribed under section 11B of the Excise Act would not be applicable if an amount is paid under a mistaken notion as it was not required to be paid towards any duty/tax. ii) The amount paid in the context of service tax for the second time has no legal basis either for levy or for payment as service tax inasmuch as there is no taxable event for which the levy and payment would apply. The impugned order is set aside - refund allowed - appeal allowed.
ISSUES PRESENTED and CONSIDERED
The core legal issue considered in this judgment is whether the appellant is entitled to a refund of an amount of Rs.6,30,235/- paid twice towards service tax liability for the period April 2017 to June 2017. The Tribunal examined whether the refund claim is time-barred under Section 11B of the Central Excise Act, 1944, as applied to service tax by Section 83 of the Finance Act, 1994. ISSUE-WISE DETAILED ANALYSIS Relevant legal framework and precedents: The legal framework involves Section 11B of the Central Excise Act, 1944, which governs the refund of duty and interest, and Section 83 of the Finance Act, 1994, which applies the provisions of Section 11B to service tax. The appellant argued that the second payment was not a tax but a deposit, and thus not subject to the limitation period under Section 11B. The appellant relied on precedents, including decisions from the Gujarat High Court and the CESTAT, which supported the view that payments made by mistake do not attract the limitation period under Section 11B. Court's interpretation and reasoning: The Tribunal interpreted that the amount paid twice does not constitute a tax since there was no taxable event for the second payment. Therefore, the limitation period under Section 11B does not apply. The Tribunal referenced the decision in Bansal Biscuits Pvt. Ltd., which held that the limitation under Section 11B is inapplicable when an amount is paid under a mistaken notion. Key evidence and findings: The appellant provided evidence of the duplicate payment made via two separate challans on the same date. The Tribunal found that the second payment was made inadvertently and was not in respect of any taxable service, thus qualifying as a deposit rather than a tax. Application of law to facts: The Tribunal applied the legal principles established in prior cases to the facts, determining that the second payment was not a tax and therefore not subject to the statutory limitation period for refund claims. The Tribunal concluded that the appellant is entitled to a refund of the duplicate payment. Treatment of competing arguments: The Revenue argued that the refund claim was time-barred under Section 11B. However, the Tribunal rejected this argument, emphasizing that the second payment did not constitute a tax and thus the limitation period did not apply. The Tribunal found the appellant's reliance on precedents persuasive and applicable to the current case. Conclusions: The Tribunal concluded that the appellant is entitled to a refund of Rs.6,30,235/-, as the second payment was not a tax but a deposit made by mistake. The Tribunal set aside the impugned order, allowing the refund claim. SIGNIFICANT HOLDINGS The Tribunal held that the limitation period under Section 11B does not apply to amounts paid by mistake, as they do not constitute a tax. The Tribunal stated: "The limitation prescribed under section 11B of the Excise Act would not be applicable if an amount is paid under a mistaken notion as it was not required to be paid towards any duty/tax." The Tribunal established the principle that amounts paid inadvertently and not in respect of any taxable event should be refunded, as retaining such amounts would be inequitable and without legal basis. The final determination on the issue was that the appellant is entitled to a refund of Rs.6,30,235/-, and the appeal was allowed in favor of the appellant, setting aside the previous orders that denied the refund.
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