2012 (10) TMI 598 - AT - Service Tax

Refund claim - appellant, by mistake paid service tax in respect of free services undertaken during the warranty period - part of the claim rejected as barred by limitation - appellant submits that in respect of the activities of servicing of vehicles during warranty period, no service tax was attracted and service tax has been paid under mistaken belief. The refund of such amount paid into service tax head should have been refunded without reference to the limitation prescribed under Section 11B of Central Excise Act Held that - The amount paid by the appellant cannot be treated to be anything other than service tax and the refund has to be considered in the light of statutory provisions governing service tax - since a statute has provided for specific provisions of limitation, the Limitation Act, 1963 is not applicable - appellant claimed refund in terms of Section 11B and the claim within the normal period of limitation stands sanctioned and the claim beyond the limitation period stands rejected

Summary

Issues:
Appeal against Commissioner (Appeals) order, service tax refund claim rejection, limitation period applicability.

Analysis:
The appellant, a dealer of motor vehicles, appealed against the Commissioner (Appeals) order rejecting a refund claim of Rs. 16,57,921 for mistakenly paying service tax on free services provided during the warranty period. The appellant argued that no service tax was due during the warranty period and sought a refund without limitation. The Chartered Accountant relied on various decisions to support the claim. The Addl. Commissioner contended that the activities were taxable services, and the tax paid could not be treated differently. The Tribunal analyzed the submissions and records, concluding that the appellant's servicing activities fell under the taxable net. As no payment was received from the service recipients during the warranty period, service tax was not payable. The Tribunal differentiated the cited cases from the present situation, emphasizing that specific provisions of limitation in the statute governed the refund claim. The Tribunal highlighted that the appellant's claim under Section 11B was within the normal limitation period and was approved, while the claim beyond the limitation period was rejected. It was clarified that the Tribunal was bound by the statutory limitation provisions, and hence, the appeal was dismissed.

This judgment dealt with the appeal against the rejection of a service tax refund claim by the Commissioner (Appeals) concerning mistakenly paid service tax on free services provided during the warranty period. The appellant's argument that no service tax was due during the warranty period and sought a refund without limitation was analyzed. The Tribunal determined that the appellant's servicing activities were taxable but clarified that as no payment was received from the service recipients during the warranty period, service tax was not payable. The Tribunal differentiated the cited cases from the present scenario, emphasizing the statutory limitation provisions governing the refund claim. The Tribunal upheld the approval of the claim within the normal limitation period while rejecting the claim beyond the limitation period, citing adherence to statutory limitation provisions.