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2021 (12) TMI 792 - AT - Service TaxRefund of service tax - Construction of Complex Service - tax paid under mistake under law - rejection on the ground of time limitation - Section 11B of the Central Excise Act, 1944 - HELD THAT - There are contrary decisions of higher fora on this issue. I find that the decision of the Hon ble jurisdictional High Court of Judicature at Madras 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 is binding, where it was held that Since the provisions of section 11B of the Act are not applicable to the claim of refund made by the petitioner, the limitation prescribed under the said provision would also not be applicable and the general provisions under the Limitation Act, 1963 would be applicable. The order of the First Appellate Authority dated 22.10.2012 has become final since the appeal filed against this order was withdrawn by the Revenue thereby accepting the order passed by the Commissioner (Appeals), which indicates that the tax collected was without the authority of law. Moreover, the liability itself for the period covered herein was not there, as observed in the Order-in-Appeal dated 22.10.2012, which casts a serious doubt on the bona fides of the Revenue when Show Cause Notice dated 21.10.2010 was issued demanding the tax for the disputed period, when the tax on the service involved itself was introduced later, with effect from 01.07.2010. Therefore, the tax paid amounts to the one paid under mistake of law. The impugned order of the First Appellate Authority is set aside and that of the Adjudicating Authority is restored - Appeal allowed - decided in favor of appellant.
Issues:
Whether the Revenue was justified in rejecting the refund claim of the appellant as time-barred? Analysis: The appellant's refund claim was rejected as time-barred by the Revenue. The case involved a Show Cause Notice issued in 2010 demanding a specific amount under Construction of Complex Services for a period between 2005 and 2007. The Order-in-Original confirmed the demand, but the First Appellate Authority allowed the refund claim stating that the Service Tax liability began only from July 2010. Subsequently, the Revenue withdrew their appeal against the First Appellate Authority's decision. The appellant then filed a refund claim in 2019, which was met with a Show Cause Notice proposing rejection due to being time-barred. The Adjudicating Authority sanctioned the refund claim, stating that the time-limit prescribed in Section 11B of the Central Excise Act was not applicable. However, the Revenue appealed, and the First Appellate Authority set aside the refund order. During the proceedings, the appellant relied on various judgments to support their case, while the Revenue cited decisions from the High Courts of Gujarat and Kerala. The Member (Judicial) analyzed the case considering the conflicting decisions from higher fora. The judgment of the Hon'ble jurisdictional High Court of Judicature at Madras in a specific case was deemed binding. It was highlighted that if service tax is paid by mistake, a claim for refund cannot be time-barred, as it would go against the Constitution's mandate. The Order-in-Appeal from 2012 had become final, indicating that the tax collected was without the authority of law. The liability for the period in question did not exist initially, casting doubt on the Revenue's actions. Therefore, the tax paid was considered to be under a mistake of law. Based on the above analysis, the rejection of the refund claim was deemed unsustainable, and the decision of the Adjudicating Authority was restored, setting aside the First Appellate Authority's order. The appeal was allowed with consequential benefits, if any, as per the law. In conclusion, the judgment focused on whether the Revenue was justified in rejecting the appellant's refund claim as time-barred. The decision was based on legal principles, precedents, and the specific circumstances of the case, ultimately leading to the restoration of the Adjudicating Authority's decision.
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