2018 (1) TMI 1011 - AT - Central Excise

Refund of service tax paid - amalgamation of companies - rejection of refund on the ground of time bar - scope of SCN - Held that - In the SCN there is no whisper as to what is the relevant date considered or the date for determining the claim to be time-bar. The refund sanctioning authority as well as the lower appellate authority have travelled beyond the SCN to conclude that the relevant date is the date of payment of service tax and that sub-clause (ec) of section 11B does not apply - rejection of refund claim is unjustified - appeal allowed - decided in favor of appellant.

Summary

Issues:
Relevant date for determining refund claim time-bar.

Analysis:
The case involved a dispute regarding the relevant date for determining whether a refund claim was filed within the prescribed time limit. The appellant, engaged in marketing products, filed a refund claim for service tax paid for storage and warehousing charges post an amalgamation. The original authority rejected the refund claim as time-barred, a decision upheld by the Commissioner (Appeals). The appellant argued that the refund claim was not time-barred as it arose from the order of amalgamation, making the service tax payment erroneous due to the merger. The appellant cited legal precedents to support their argument.

The appellant contended that the relevant date for the refund claim should be the date of the order of amalgamation, not the date of payment of service tax. The appellant argued that the merger resulted in the provision of services to themselves, not to a distinct service recipient, making the service tax payment erroneous. The appellant relied on legal interpretations and previous tribunal decisions to support their claim that the refund claim was not time-barred.

The respondent, on the other hand, argued that the relevant date under section 11B for a refund claim should be an order arising from appellate proceedings related to a dispute. The respondent emphasized that the order of amalgamation was not an order in the course of a dispute relating to the amount claimed as a refund. The respondent highlighted the legal principle of noscitur a sociis to interpret associated words in the context of appellate proceedings.

The Tribunal found merit in the appellant's argument that the rejection of the refund claim was unjustified. The Tribunal noted that the show cause notice did not clearly specify the relevant date for determining the claim to be time-barred. The Tribunal held that the rejection of the refund claim without clear allegations in the show cause notice was improper. Consequently, the impugned order was set aside, and the appeal was allowed with any consequential relief.

In conclusion, the Tribunal's decision focused on clarifying the relevant date for determining the time-bar status of a refund claim, emphasizing the importance of clear allegations in the show cause notice to allow the appellant to defend their case effectively.