2017 (8) TMI 471 - AT - Service Tax

Refund claim - service tax paid erroneously - rejection on the ground of time limitation - Section 11B of the Central Excise Act, 1944 - appellant case is non-applicability of time limit in cases of payment in respect of non-taxable service - Held that - the time limit under Section 11B of the Central Excise Act, 1944 is applicable even in cases of payment of service tax paid due to mistake of law - the refund claim is filed beyond the period of limitation as provided under Section 11B of the Central Excise Act, the refund claim rightly rejected - appeal dismissed - decided against appellant.

Summary

Issues:
Appeal against rejection of refund claim due to time bar under Section 11B of Central Excise Act.

Analysis:
The appellant, a partnership firm, provided Business Auxiliary Service and power coating service to a client. They collected and remitted service tax to the Department for job work done by them. Following an audit objection, the appellant reversed CENVAT credit and debited the service tax amount to their account, seeking a refund later. The original authority rejected the refund claim citing time bar under Section 11B of the Central Excise Act. The appellant contended that they were exempt from service tax under Notification No.8/2005 and not obligated to pay. They argued for a refund due to an erroneous payment, invoking non-applicability of time limit for non-taxable service payments. The Commissioner (A) rejected the appeal, leading to the present case.

The appellant argued that the impugned order was unsustainable as it disregarded their submissions. They claimed exemption from service tax under Notification No.8/2005, asserting the payment was made under a mistake of law without legal obligation. They sought a refund based on unjust enrichment principles. The appellant relied on legal precedents to support their position, emphasizing the lack of legal authority for the service tax collection. Conversely, the AR defended the rejection, citing the time-barred nature of the refund claim. The AR presented various legal decisions to support the time limitation aspect, arguing that even in cases of illegal levy, refund claims must adhere to statutory limitations.

The AR further referenced specific judgments, including a Supreme Court ruling and a Karnataka High Court decision, to uphold the applicability of Section 11B's time limit in cases of service tax paid due to a mistake of law. After hearing both parties, the Tribunal upheld the impugned order, emphasizing the adherence to the limitation period outlined in Section 11B of the Central Excise Act. By aligning with the decisions cited by the Revenue, the Tribunal found no fault in the Commissioner (A)'s order and dismissed the appellant's appeal, considering the refund claim beyond the statutory time limit.