2017 (10) TMI 558 - AT - Service Tax

Refund claim - rejection on the ground of limitation - The appellant had filed refund claim for this amount on 30.6.2008. The lower authorities have held that the refund is in respect of excess tax paid during the period March 2005 to May 2005, hence it is hit by limitation - Held that - It can be seen that the adjudicating authority has disposed of the proceedings initiated by the show-cause notice which was demanding tax liability from the appellant. During the adjudication proceedings, appellant had discharged various amounts through TR6 and CENVAT account and there has been an excess payment of the service tax liability, which is correctly claimed by the appellant on 30.6.2008 by filing a refund application. When the adjudicating authority has himself held that tax liability for the period October 2004 to May 2005 has been paid in excess, and passed an adjudication order on 11.4.2008, both the lower authorities, in this case, cannot hold that the appellant has filed a refund claim belatedly. It is very clear from the adjudication order that the tax liability of the appellant has been finalized by the authorities on 11.4.2008 and having filed the refund claim on 30.6.2008 to my mind it is within three months from the date of adjudication - refund is rightly filed within time as provided under Section 11B of the Central Excise Act, 1944 which is made applicable to the refunds under Finance Act, 1994. Reliance placed in the case of CCE, Thane-I vs. Clariant (I) Ltd. 2015 (8) TMI 1121 - BOMBAY HIGH COURT , where it was held that The only requirement is that the refund must be sought within the specified period and the limitation is provided by the second proviso to Section 11B. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Rejection of refund claim on the ground of limitation.

Analysis:
The appeal was against the Order-in-Appeal No. 650/2014-ST dated 27/11/2014 passed by the Commissioner of Central Excise, Customs, and Service Tax, Cochin. The issue involved in this appeal was the rejection of a refund claim of ?4,66,091/- by the lower authorities on the ground of limitation. The appellant had filed the refund claim on 30.6.2008, citing an adjudication order passed by the Commissioner of Central Excise and Customs. The lower authorities contended that the refund was in respect of excess tax paid during a specific period and therefore, was time-barred.

Upon reviewing the records, it was found that a show-cause notice was issued to the appellant in 2006, demanding service tax liability. The adjudication order dated 11.4.2008 confirmed the demand of ?3,51,936/- as Education Cess, indicating that the appellant had paid an excess amount of ?4,66,091/-. The adjudicating authority concluded that there was no intent to evade payment of Education Cess and refrained from imposing a penalty under Section 76.

The appellant filed the refund claim on 30.6.2008, within three months of the adjudication order. The adjudication order had finalized the tax liability for the period in question, making the refund claim timely under Section 11B of the Central Excise Act, 1944. The judgment of the Hon’ble High Court of Bombay in a similar case supported the appellant's position, emphasizing that the refund application was well within the time limit.

In light of the above, the Tribunal found the lower authorities' decision unsustainable and set it aside, allowing the appeal with consequential relief. The judgment was pronounced and dictated in Open Court on 27/07/2017.