2019 (12) TMI 185 - AT - Service Tax

Refund of Service tax - rejection on the ground that the claim of the appellant was barred by limitation - Section 11B of the Central Excise Act, 1944 - HELD THAT - The appellant has placed on record the Minutes of Board Meeting of the appellant-corporation held on 28.09.2011 wherein the Board had resolved to pay the Service Tax amount under protest. There is nothing on record nor in the pleadings of the appellant that the same was furnished before the lower authorities. Also, the said document has not at all been discussed anywhere in the orders of both the lower authorities. This assumes importance especially in the light of the fact that the payment appears to have been made not during investigation, but post Order-in-Original but pending adjudication of the first appeal. Further, the Hon ble jurisdictional High Court in the case of M/S. 3E INFOTECH VERSUS CUSTOMS, EXCISE SERVICE TAX APPELLATE TRIBUNAL, COMMISSIONER OF CENTRAL EXCISE (APPEALS-I) 2018 (7) TMI 276 - MADRAS HIGH COURT has categorically held that even when Service Tax was paid under mistake of law, the period of limitation cannot be invoked to deny the refund. Appeal allowed - decided in favor of appellant.

Summary

Issues involved:
- Denial of refund under Section 11B of the Central Excise Act, 1944 on the ground of limitation.

Detailed Analysis:
The appellant in this case was involved in rendering services categorized as Security Agency, Manpower Service, and Maintenance and Repair Service. They received a commission for maintaining a helicopter by the Government of Tamil Nadu. A Show Cause Notice was issued, leading to a demand being confirmed. However, the Ld. First Appellate Authority set aside the demand, stating that the activity was not Business Auxiliary Service but "Management, Maintenance or Repair Service." The appellant paid the disputed tax to save interest and penalty and later sought a refund. The appellant argued that the payment was made under protest, citing relevant legal decisions and High Court judgments to support their claim for refund.

On the contrary, the Departmental Representative contended that the claim for refund was time-barred as the cause of action arose in 2013, while the deposit was made in 2011, and the refund application was filed in 2017 without any explanation for the delay. The Departmental Representative emphasized the strict construction of taxing statutes and relied on legal precedents to support their stance that the refund claim should be rejected.

The Tribunal considered the arguments presented by both sides, reviewed the documents on record, and analyzed the legal decisions cited. The Tribunal noted that the appellant had paid the Service Tax amount under protest as per the Minutes of the Board Meeting, which was not presented before the lower authorities. The Tribunal distinguished the case relied upon by the Revenue, stating it dealt with a different statutory provision. Referring to relevant High Court decisions, the Tribunal highlighted the distinction between voluntary and forced payments made under protest and ruled in favor of the appellant. The Tribunal emphasized the binding nature of jurisdictional High Court decisions and allowed the appeal, granting consequential benefits as per the law.

In conclusion, the Tribunal allowed the appeal, considering the payment made under protest and the precedents set by jurisdictional High Court decisions, which supported the appellant's entitlement to the refund under Section 11B of the Central Excise Act, 1944.