2018 (2) TMI 1181 - AT - Service Tax

Refund claim - rejection on the ground of time limitation - Held that - if an assessee paid the duty/service tax by mistake or in good faith or pressure from the Dept. the said amount shall go to deposit towards Service Tax or duty - Admittedly in this case the appellant has paid Service Tax being recipient by mistake therefore the said amount shall be deposit as Service Tax and the provisions of Sec 11B of the Act is not applicable - refund allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
Refund claim rejection as time-barred under Sec 11B of the Central Excise Act, 1944.

Analysis:
The appellant appealed against the rejection of their refund claim as time-barred due to the provisions of Sec 11B of the Central Excise Act, 1944. The appellant received taxable services on 'construction service' during April 2013 to Sept 2013 and paid 50% of Service Tax to the Central Government by May and July 2013. The refund claim for the excess payment was submitted in October 2014 but received by the respondent in November 2014, beyond one year of the original payment. The appellant contested the denial of the refund claim citing a Tribunal decision and argued that Sec 11B was not applicable based on recent case law.

The appellant's counsel argued that the denial of the refund claim was based on a challenged decision and presented a recent Tribunal case where a refund claim was allowed under similar circumstances. On the other hand, the Authorized Representative relied on a different Tribunal decision to support the rejection of the refund claim. The Tribunal considered both arguments and examined the relevant case laws cited by the parties.

The Tribunal noted that the decision relied upon by the Authorized Representative was by a Single Member at the Bombay Bench and did not adequately address the specific circumstances of the case. The Tribunal also referenced a Supreme Court case and a recent Tribunal decision where it was held that if an assessee pays duty or service tax by mistake, the amount should be considered as deposited towards the tax, making Sec 11B inapplicable. Since the appellant had paid Service Tax as a recipient by mistake, the Tribunal concluded that the refund claim was not time-barred under Sec 11B.

Consequently, the Tribunal set aside the impugned order and allowed the appeals, ruling in favor of the appellant's entitlement to the refund claim. The judgment highlighted the principle that if a taxpayer pays tax by mistake, the amount should be treated as deposited towards the tax liability, thereby making the statutory provisions of Sec 11B inapplicable in such cases.