2017 (1) TMI 96 - AT - Service Tax

Rejection of refund claim - time bar - Mining of Mineral, Oil or Gas - composite services - period prior to 1.6.2007 - erroneous payment of tax - Held that - It is an admitted fact that service tax has been levied under the category of mining and mineral oil or gas only w.e.f. 1.6.2007. The service tax was paid by the service providers undertaking the mining activity during the period prior to the above date and the same has been reimbursed to the service providers by the appellant. As such, the refund itself becomes admissible on merits. However, the refund claim stands filed on 7.7.2009 for the tax paid prior to 1.6.2007 and hence, it has been filed beyond the period of one year permitted under Section 11 B - refund rightly rejected on ground of time bar. Hon ble High Court has allowed the refund of tax making use of its extra ordinary jurisdiction conferred upon them under Article 226 of the Constitution of India. Admittedly, such powers are not vested in this Tribunal. The Tribunal has been created in the statute and cannot exercise such weeping powers, which are bestowed upon the High Courts. Consequently, we are unable to extend the benefit of these High Courts decisions. Refund rejected - appeal dismissed - decided against appellant.

Summary

Issues:
1. Rejection of refund claim by the Original Authority and Commissioner (Appeals).
2. Applicability of time limit for filing refund claim under Section 11 B.
3. Admissibility of refund claim for service tax paid prior to 1.6.2007.
4. Comparison of case laws supporting and opposing the refund claim.
5. Interpretation of High Court judgments on similar refund cases.

Analysis:
The appeal pertains to the rejection of a refund claim by the Original Authority and Commissioner (Appeals) concerning service tax paid by a mining company for services received from contractors. The company filed a refund claim of &8377; 3,30,71,362/- for services rendered before 1.6.2007, erroneously believed to be taxable under the Mining of Mineral category post-1.6.2007. The main contention was the refund claim not being time-barred under Section 11 B, as the tax was erroneously collected and paid. The Commissioner (Appeals) upheld the rejection citing the one-year limitation under Section 11 B.

The appellant argued that the payment was not required as service tax pre-1.6.2007 and relied on case laws supporting refund claims beyond the specified period. The Revenue contended that the refund should adhere to the statutory provisions of Section 11B, emphasizing the time limits for grant of refund. While the service tax on mining activities was introduced from 1.6.2007, the refund claim was filed on 7.7.2009 for taxes paid earlier, leading to rejection based on time-bar.

The appellant highlighted High Court judgments allowing refunds in similar cases where tax was erroneously collected. However, the Tribunal clarified its jurisdiction limitations compared to High Courts in granting refunds under extraordinary powers. Consequently, the Tribunal upheld the impugned order rejecting the appeal, emphasizing the inability to extend the benefit of High Court decisions. The appeal was dismissed on 23.12.2016, affirming the rejection of the refund claim based on the time limitation under Section 11 B.