2018 (8) TMI 419 - AT - Service Tax

Refund of excess service tax paid - Denial on the ground of time bar - case of appellant is that as the service tax was illegally collected by revenue and was not required to be paid, limitation prescribed under Section 11B of the Act would not be applicable - Held that - Every refund claim arises on the ground that the same is not payable. If the amounts claimed to be refunded were otherwise required to be paid, the refund claim would not arise - If all the refund claims which are not payable to the revenue, are allowed without examining the limitation aspect, the provisions of Section 11B, which provide a period of one year for claiming such refund, would become redundant. Reference can be made to the Hon ble Supreme Court s decision in the case of M/s Porcelain Electrical Manufacturing Co. Vs Collector of Central Excise, New Delhi 1994 (11) TMI 145 - SUPREME COURT OF INDIA , wherein it was observed that the revenue authorities are bound by the provisions of the Act and cannot exercise the extraordinary jurisdiction, as available to the High Courts in terms of the Article 226 of the Constitution - Tribunal being a creature of the Act cannot go beyond the provisions of the Act and cannot extend the period of limitation for claiming the refund - Inasmuch as the refund claim admittedly stands filed after a period of one year from the relevant date, the lower authorities have rightly rejected the same as barred by limitation. Appeal dismissed - decided against appellant.

Summary

Issues:
1. Time bar issue in filing a refund claim beyond the normal period.
2. Applicability of Section 11B of the Central Excise Act regarding limitation on refund claims.
3. Interpretation of whether service tax was required to be paid affecting the limitation period.
4. Adherence to legal precedents and decisions of the Hon'ble Supreme Court on limitation periods for refund claims.

Analysis:
The case involved a dispute over a refund claim filed by the appellant for excess service tax paid while providing services to a government entity. The appellant argued that since the service tax was not required to be paid, the limitation under Section 11B of the Central Excise Act should not apply. However, the Original Authority and Commissioner (Appeals) rejected the claim as time-barred. The Tribunal noted that refund claims arise when amounts are not payable and that allowing all refund claims without considering the limitation aspect would render Section 11B redundant.

Moreover, the Tribunal highlighted that the Commissioner (Appeals) relied on Supreme Court decisions like Union of India Vs Namdang Tea Estate, Assistant Commissioner of Central Excise Vs Kashyap Engg & Metallurgicals Pvt. Ltd., and Collector of Central Excise Vs Rallis India Ltd., emphasizing the need to adhere to the limitation period under Section 11B. The Tribunal also referenced the case of M/s Porcelain Electrical Manufacturing Co. Vs Collector of Central Excise, New Delhi, stating that revenue authorities must comply with statutory provisions and cannot extend limitation periods for refund claims. As the refund claim was filed after the one-year period specified by Section 11B, the Tribunal upheld the lower authorities' decision to reject the claim as time-barred.

In conclusion, the Tribunal upheld the impugned orders and dismissed the appeal, emphasizing the importance of adhering to statutory limitations on refund claims, as established by legal precedents and the provisions of the Central Excise Act.