2018 (7) TMI 1445 - AT - Service Tax

Refund claim of service tax paid erroneously - refund was rejected on the ground of Time Limitation - Section 11B of the Central Excise Act - the appellant has prayed that the time limit under Section 11B will not be applicable since the tax has been paid by mistake when there was no tax liability - unjust enrichment. Held that - The Larger Bench of the Tribunal in the case of Veer Overseas 2018 (4) TMI 910 - CESTAT CHANDIGARH has been held that the time limits prescribed under Section 11B will govern all refund claims of Service Tax - refund rightly denied. Unjust enrichment - Held that - Perusal of some of the sample tickets/ booking confirmations indicates that no Service Tax has been recovered along with fare. This fact has also been categorically certified by the Chartered Accountant after perusal of the books of accounts of the appellant for the relevant period - rejection of refund on this ground not tenable. Appeal allowed in part.

Summary

Issues:
1. Time bar for filing refund claims under Section 11B of the Central Excise Act.
2. Unjust enrichment in claiming refund of Service Tax.

Analysis:
1. The appeal challenged the rejection of refund claims by the Original Authority due to the time bar and unjust enrichment. The appellant mistakenly paid Service Tax for renting passenger buses on fixed routes, which was not a taxable service during the relevant period. The appellant contended that Section 11B time limits should not apply as the tax was paid in error, citing the case of Monnet International Ltd. The Tribunal upheld that the time limits under Section 11B govern all Service Tax refunds, following the decision in Veer Overseas. Consequently, the rejection of the refund claim based on the time bar was upheld.

2. Regarding unjust enrichment, the appellant demonstrated through sample tickets and a certificate from a Chartered Accountant that no Service Tax was collected from passengers. The Revenue argued that the time limits under Section 11B apply to all Service Tax refunds, referencing the Veer Overseas case. However, the Tribunal found that the rejection of the refund claim based on unjust enrichment was not justified. As no Service Tax was collected from passengers, the Tribunal allowed the refund of tax paid within the time limit. Therefore, the appeal was partly allowed, setting aside the rejection based on unjust enrichment.