Time-limit of Section 11B of the Central Excise Act, 1944 doesn’t apply to refund of wrongly paid Service tax

[Bimal jain]

Dear Professional Colleague,

Time-limit of Section 11B of the Central Excise Act, 1944 doesn’t apply to refund of wrongly paid Service tax

We are sharing with you an important judgment of CESTAT, Mumbai, the case of Jyotsana D. Patel Vs. Commissioner of Central Excise, Nagpur [2014 (10) TMI 642 - CESTAT MUMBAI ] on following issue:

Issue:

Whether the Time-limit prescribed under Section 11B of the Central Excise Act, 1944 would apply to refund of wrongly paid Service tax?

Facts and background:

In the instant case, Jyotsana D. Patel (“the Appellant”) purchased a residential unit from a builder, on which the builder had collected Service tax and deposited the same with the Department. As there is no levy of Service tax on residential unit as held by the Hon'ble High Court in the case of K.V.R. Constructions Vs. CCE [2009 (8) TMI 150 - KARNATAKA HIGH COURT ], the Appellant filed a refund claim of the amount paid by the builder as Service tax to the Department. The refund claim filed by the Appellant was sanctioned by the Adjudicating Authority.

Thereafter, on appeal being filed by the Revenue before the Commissioner (Appeals), the Commissioner (Appeals) held that the refund claim is barred by limitation. Being aggrieved, the Appellant filed an appeal before the Hon’ble CESTAT, Mumbai.

Held:

The Hon’ble CESTAT, Mumbai held that when the Appellant was not required to pay any Service tax for acquisition of residential unit, amount deposited would not be considered as an amount of Service tax and therefore, time limit prescribed under Section 11B of the Central Excise Act, 1944 will not be applicable. Accordingly, Order of the Commissioner (Appeals) was set aside and the matter was decided in favour of the Appellant.

Hope the information will assist you in your Professional endeavors. In case of any query/ information, please do not hesitate to write back to us.

Thanks and Best Regards,

Bimal Jain

FCA, FCS, LLB, B.Com (Hons)

Delhi:

Flat No. 34B, Ground Floor, Pocket - 1,

Mayur Vihar, Phase - I,

Delhi – 110091, India

Desktel: +91-11-22757595/ 42427056

Mobile: +91 9810604563

Chandigarh:

H.No. 908, Sector 12-A,

Panchkula, Haryana – 134115

Kolkata:

Ist Floor, 10 R G Kar Road

Shyambazar, Kolkata – 700 004

Email: [email protected]

Web: www.a2ztaxcorp.com

Disclaimer: The contents of this document are solely for informational purpose. It does not constitute professional advice or recommendation of firm. Neither the authors nor firm and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any information in this document nor for any actions taken in reliance thereon.

Readers are advised to consult the professional for understanding applicability of this newsletter in the respective scenarios. While due care has been taken in preparing this document, the existence of mistakes and omissions herein is not ruled out. No part of this document should be distributed or copied (except for personal, non-commercial use) without our written permission.