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2021 (2) TMI 772 - Commissioner - Service TaxRefund of excess paid service tax - time limitation - date of deposit of tax vis- -vis date of filing of refund claim in terms of Section 11B of the Central Excise Act, 1994 - HELD THAT - On reading of Section 11B of Central Excise Act 1944, It is found that any person claiming refund must make an application for refund before the expiry of one year from the date of payment of tax and not from any other date. The clock for one year would start ticking from the date on which the appellant has paid the tax. Thus plain reading of the provisions of section 11B; it is found that the claim is not time barred as the appellant had filed refund claim within one year from the date of payment of tax. As per decision of the tribunal in the case of DURALINE INDIA PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, GOA 2008 (9) TMI 295 - CESTAT MUMBAI the date of refund claim shall be reckoned from the date when the refund application was originally filed, not from the date when defects pointed out by the department and were cured by the appellant. Thus, the amount excess paid in May, 2010 is in the nature of Revenue deposit. Further, there is no limitation for refund of Revenue deposit. In this view of the matter it is held that the refund claim is not barred by limitation. It is also found that the tax was paid through CENVAT credit account and not through cash challans. The excess amount of duty liable to be re-credited in the CENVAT credit Account as the Appellant cannot be given liberty to encash accumulated CENVAT credit bypassing Rule 5 of CENVAT Credit Rules, 2004. Accordingly, I direct the Adjudicating Authority to grant the refund of the said amount of ₹ 9,92,929/- and to be re-credited in the CENVAT credit Account. Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Whether the claim of refund is barred by limitation under Section 11B of the Central Excise Act, 1944. 2. Whether the excess payment of service tax should be treated as a deposit and not subject to the limitation period. 3. Whether the date of the original refund application or the date of rectification should be considered for the limitation period. 4. Whether the excess service tax paid should be adjusted on a FIFO basis. 5. Whether interest is payable on the delayed refund. Issue-wise Detailed Analysis: 1. Whether the claim of refund is barred by limitation under Section 11B of the Central Excise Act, 1944: The appellant filed a refund claim on 20.04.2011 for the excess service tax paid on 06.05.2010. The department issued a defect memo on 18.05.2011, and the appellant rectified the claim on 20.05.2011. The department contended that the refund claim was time-barred as it was re-submitted after one year from the date of payment of tax. However, the Commissioner (Appeals) held that the claim was within the limitation period as the original application was filed within one year from the date of payment of tax. The Hon'ble CESTAT, Kolkata remanded the matter to re-examine the dates of deposit and filing to decide the limitation aspect. 2. Whether the excess payment of service tax should be treated as a deposit and not subject to the limitation period: The Commissioner (Appeals) found that the excess service tax paid was in the nature of a revenue deposit. It was held that there is no limitation for the refund of a revenue deposit, and thus, the refund claim was not barred by limitation. The excess amount paid was directed to be re-credited in the CENVAT credit account. 3. Whether the date of the original refund application or the date of rectification should be considered for the limitation period: The Commissioner (Appeals) considered the date of the original refund application (20.04.2011) as the relevant date for the limitation period, not the date of rectification (20.05.2011). This decision was supported by case laws such as Arya Exports and Industries and Duraline India (P) Ltd., which established that the original filing date should be considered for limitation purposes. 4. Whether the excess service tax paid should be adjusted on a FIFO basis: The appellant argued that the excess service tax paid should be adjusted against liability on a FIFO basis, in compliance with Accounting Standard-9. The Commissioner (Appeals) agreed with this contention, noting that the appellant had discharged service tax based on provisional entries and that the excess payment should be treated accordingly. 5. Whether interest is payable on the delayed refund: The appellant contended that interest is payable if the refund is not disbursed within the stipulated time. However, the judgment did not explicitly address the issue of interest on the delayed refund, focusing instead on the refund's timeliness and nature. Conclusion: The appeal was allowed, and the refund claim was found to be within the limitation period. The excess service tax paid was treated as a revenue deposit, not subject to the limitation period, and was directed to be re-credited in the CENVAT credit account. The judgment emphasized that procedural delays by the department should not deprive the appellant of their rightful refund.
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