2020 (3) TMI 1099 - AT - Service Tax

Refund of service tax - rejection on the ground of time limitation - service tax paid on various activities, which were exempt from service tax in terms of Mega Exemption N/N. 25/2012-ST dated 20/06/2012 - HELD THAT - Every refund claim arises on account of fact that the same was not required to be paid - Reference can be made to the Hon ble Madras High Court decision in the case of ASSISTANT COMMISSIONER OF SERVICE TAX, CHENNAI VERSUS M/S NATARAJ AND VENKAT ASSOCIATES 2014 (5) TMI 179 - MADRAS HIGH COURT laying down that the refund claim beyond the period of limitation provided under law is totally barred by limitation. Even the fact that the tax was paid under a mistake of law, cannot be adopted for grant of such refund. There are no justifiable reasons to interfere in the impugned order of Commissioner (Appeals) - appeal dismissed - decided against appellant.

Summary

Issues: Refund claim time-barred due to limitation clause of Section 11B read with Section 83 of Finance Act, 1994.

Analysis:
The Appellate Tribunal CESTAT ALLAHABAD heard the appeal concerning a refund claim of the appellant amounting to ?8,04,232 (originally claimed as ?22,98,805). The refund claim was based on the exemption from service tax under Mega Exemption Notification No.25/2012-ST for activities conducted between September 2012 and August 2014. The claim was submitted on 23/09/2016. However, the Lower Authorities rejected the claim as time-barred. The Commissioner (Appeals) noted that the available challans pertained to a period prior to one year from the date of the refund claim, hence deeming it time-barred. In response, the appellant argued in their written submission that since the service tax was not liable to be paid, the limitation clause should not apply.

The Appellate Tribunal, after considering the arguments, referred to legal precedents to address the issue. They cited the decision of the Hon'ble Supreme Court in the case of Porcelain Electric Magg. Co. vs. Collector of Central Excise, New Delhi, which emphasized that refund claims filed before Departmental authorities are governed by the time limit provided under the statute, and the general law of limitation does not apply. Additionally, they referenced a decision of the Hon'ble Madras High Court in Assistant Commissioner of Service Tax, Chennai vs. Nataraj & Venkat Associates, which stated that refund claims beyond the statutory limitation period are entirely barred by limitation, even if the tax was paid under a mistake of law. Based on these legal principles, the Appellate Tribunal concluded that there were no justifiable reasons to interfere with the Commissioner (Appeals)'s decision, and therefore, the appeal was rejected.

This judgment highlights the significance of adhering to statutory limitation periods for refund claims, emphasizing that even if taxes were paid in error, the limitation clause must be followed. The legal precedents cited provide clarity on the application of time limits in such cases, ensuring consistency in the treatment of refund claims under the law.