2016 (6) TMI 158 - AT - Service Tax

Eligibility of refund claim - payment of service under protest - rejection of refund for the period 01/4/2006 to 23/4/2007 as barred by limitation and for the period post 24/4/2007, on account of non-submission of documentary evidence indicating that refund claim was related to payment of service tax for Construction of Residential Services - Service tax paid under protest - Held that - the respondent s claim of refund of service tax cannot be held to have been made by the said letter dated 24/4/2007 and the same is clearly relatable to future service tax which they started paying under protest in terms of the said letter. There is no mention of the period for which the refund of service tax is being sought. Merely on requesting the Superintendent to refund the service tax, without even quantifying the same and without even referring to the period during which the same was deposited, especially when they continued to pay in future awaiting the decision of the Hon ble Allahabad High Court cannot be considered to be a refund application for the payments already made by them in the past. As such, we fully agree with the Revenue that the said letter cannot be considered to be a refund application. It is well settled law that the Authorities working under the Act are bound by the provisions of the Act and no general limitation period can be adopted for grant of refund even in those cases where it was not required to be paid. The provisions of Section 11B of the Central Excise Act, 1944 lays down the limitation period of one year from th4e relevant date for claim of refund to be made by an Assessee unless the same has been paid under protest. It is well settled law that the Authorities working under the Act are bound by the provisions of the Act and no general limitation period can be adopted for grant of refund even in those cases where it was not required to be paid. The provisions of Section 11B of the Central Excise Act, 1944 lays down the limitation period of one year from th4e relevant date for claim of refund to be made by an Assessee unless the same has been paid under protest. Accordingly, the refund of ₹ 72,21,075/- is barred by limitation as held by the Original Adjudicating Authority. In respect of the remaining amount of ₹ 32,67,569/-, which falls within the limitation period, we note that the fact the service tax was deposited by the Assessee in relation to the services of Residential Complex Construction is required to be examined. The factual position is required to be ascertained irrespective of the fact as to whether the Assessee was registered under the said services or not. Further, the principle of unjust enrichment is also required to be examined. Such factual verifications can be done only at the level of Original Adjudicating Authority, for which purpose we remand the matter to him. - Revenue s appeal is partially allowed and partially remanded

Summary

Issues:
1. Refund claim of service tax by the respondent.
2. Interpretation of a letter as a refund application.
3. Limitation period for refund claim.
4. Examination of service tax deposit related to Residential Complex Construction.
5. Principle of unjust enrichment.

Analysis:
1. The respondent filed a refund claim seeking a refund of service tax paid for the period April 2006 to September 2008. The Commissioner (Appeals) allowed the refund claim, but the Revenue appealed against it, primarily on the ground of limitation.

2. The key issue was the interpretation of a letter dated 24/4/2007 by the respondent. The letter referred to a decision of the Allahabad High Court and stated the intention to deposit service tax in protest, with a condition for refund if the issue is decided in favor of the builder. The Commissioner (Appeals) considered this letter as a refund application, but the Tribunal disagreed. The Tribunal analyzed the content of the letter and concluded that it did not constitute a refund application for past payments but rather indicated a prospective protest for future service tax payments.

3. Regarding the limitation period for the refund claim, the Tribunal held that the refund application filed on 25/2/2009 was beyond the limitation period for the period prior to 24/4/2007. The Tribunal applied the provisions of Section 11B of the Central Excise Act, 1944, which sets a limitation period of one year from the relevant date for claiming a refund, unless paid under protest. Therefore, the refund claim of ?72,21,075/- was barred by limitation.

4. The Tribunal also noted that the remaining amount of ?32,67,569/- fell within the limitation period. However, it required further examination to determine if the service tax deposit was related to Residential Complex Construction services, regardless of the respondent's registration under that category. The matter was remanded to the Original Adjudicating Authority for factual verifications and consideration of the principle of unjust enrichment.

5. In conclusion, the Tribunal partially allowed the Revenue's appeal and partially remanded the matter for further examination. The decision clarified the interpretation of the letter as a prospective protest rather than a refund application for past payments and emphasized the importance of complying with the limitation period for refund claims.