2017 (11) TMI 1402 - AT - Service Tax

Refund claim - amount paid under protest - time limitation - Held that - the challans furnished by the respondent clearly reflect that the payment was made under protest and once the payment is made under protest, the time limit under Section 11B does not apply - when the amount that the assessee has claimed is not payable to the Government, the lower authority ought to have discussed the issue on merits rather than rejecting the sole issue whether the payment is made under protest - appeal dismissed - decided against Revenue.

Summary

Issues:
Appeal against refund claim rejection - Payment under protest - Applicability of Section 11B - Merits of refund claim examination

Analysis:
The appeal was filed by the Revenue against the Commissioner(Appeals) order allowing the assessee's appeal and setting aside the Order-in-Original for refund claim examination. The assessee filed a refund claim for service tax, interest, and penalty paid erroneously due to an audit objection. The Revenue contended that the payment was voluntary and not under protest, thus not eligible for a refund. The lower authority rejected the refund claim, leading to the appeal. The Revenue argued that the impugned order did not consider relevant legal provisions and past decisions, claiming the payment was voluntary. Conversely, the assessee argued that the audit report did not have the authority of an adjudicating body, and the payment was made under protest, making them eligible for a refund. The assessee cited various legal precedents supporting their position.

Upon review, the Tribunal found no fault in the Commissioner(Appeals) order, supported by documentary evidence. The challans indicated the payment was made under protest, exempting it from the one-year limitation under Section 11B. The Tribunal noted that the lower authority should have examined the refund claim on its merits instead of rejecting it outright. The Commissioner(Appeals) correctly based the decision on relevant legal precedents, setting aside the Order-in-Original for further examination of the refund claim. The Tribunal upheld the Commissioner(Appeals) decision, dismissing the Revenue's appeal.

In conclusion, the Tribunal affirmed the Commissioner(Appeals) decision, emphasizing the importance of considering whether payments were made under protest and examining refund claims on their merits. The decision highlighted the significance of documentary evidence and legal precedents in resolving such disputes.