2017 (5) TMI 466 - AT - Service Tax

Refund claim - N/N. 11/2005-ST dated 19/04/2005 issued under Rule 5 of Export of Services Rules, 2005 - denial on account of time limitation - Held that - provision of Section 11B of the Central Excise Act, 1944 dealing with refund/rebate have been made applicable to service tax by virtue of Section 83 of the Finance Act, 1994. Any application for refund of tax must be filed before the expiry of one year from relevant date. The limitation as prescribed by the law cannot be extended by any authority as no such relaxation or discretion is provided in the law. The appellants filed application for rebate on 02/02/2011. The period of payment of service tax is 2005-2006 to 2009-2010 - Applying the statutory time limit, it is found that the appellants have preferred the claim after one year of payment of tax. Clearly the claim is hit by limitation. Regarding the submission of the appellant that the amount which is not a tax cannot be retained by the Government, we note that the amount has been paid as service tax under proper heading and was duly appropriated towards the tax liability of the appellant. Any return of the amount collected as tax in terms of provisions of Finance Act, 1994 has to be made in terms of the provision applicable to such collection. We may note here that any money to be returned to the claimant is mainly on the ground that the same is not to be retained by the Government as per the provisions of law. Limitation is part of the law. Even to return an amount which is excess paid over and above the legal obligation (making the excess paid tax as not a tax) the provisions of appropriate tax law has to be applied. Refund rejected - Appeal dismissed - decided against appellant.

Summary

Issues:
- Appeal against rejection of refund of service tax
- Jurisdiction of Tribunal in deciding appeals against Commissioner (Appeals)
- Claim for refund beyond statutory time limit
- Applicability of Section 11B of Central Excise Act, 1944
- Legal principles regarding refund of excess tax paid
- Interpretation of Article 265 of the Constitution
- Case laws on refund claims under mistaken belief
- Tribunal's powers under Finance Act, 1994

Analysis:
1. The appeal was filed against the rejection of a refund claim for service tax paid on exported services. The appellants claimed a refund of &8377; 50,91,030/- for the period 2005-2006 to 2009-2010 under Notification 11/2005-ST. The Original Authority rejected the claim as time-barred under Section 11B of the Central Excise Act, 1944, which was upheld by the Commissioner (Appeals).

2. The jurisdiction of the Tribunal in deciding appeals against Commissioner (Appeals) was challenged initially, but the Hon’ble Delhi High Court directed the CESTAT to hear and decide the appeal on merits. The appellant argued that the service tax was paid by mistake and should be refunded as no tax should be levied or collected without authority of law as per Article 265 of the Constitution.

3. The appellant contended that the Department cannot retain the amount not legally due, but the Department argued that no refund can be granted beyond the statutory time limit set by Section 11B. The Tribunal noted that the law of limitation is based on public policy to ensure certainty and finality, citing relevant legal precedents to support the analysis.

4. Various case laws were examined, including Geojit BNP Paribas Financial Services Ltd. and Joshi Technologies International, Inc., to distinguish mistaken payment claims from the present case where service tax was paid and later deemed not payable. The Tribunal emphasized that the claim was hit by limitation as it was filed after one year of tax payment.

5. The Tribunal highlighted that any money to be returned must be in accordance with the provisions of the Finance Act, 1994, and that even excess paid tax must be returned within the legal framework. The Tribunal concluded that the appellant’s claim cannot be considered validly made within the statutory limitations, ultimately rejecting the appeal.

6. The judgment reaffirmed the Tribunal's powers under the Finance Act, 1994, in dealing with statutory appeals related to service tax matters. The decision was based on a thorough analysis of legal provisions, case laws, and the Tribunal's jurisdiction, leading to the rejection of the appeal due to being time-barred under Section 11B of the Central Excise Act, 1944.