2022 (6) TMI 430 - AT - Service Tax

Refund claim alongwith the interest - rejection on the ground that period of limitation under Section 11 B expired - HELD THAT - There is sufficient evidence on record that appellant had dispatched the refund applications by speed post on 8.11.2016, which were returned by the Department by refusing to accept. Further, refusing of refund by the Department is evident from the facts on record, as the Service Tax Division has been shifted from CGO Complex, New Delhi to Ambedkar Bhawan, Rohini, New Delhi. Thus, it is held that the appellant had dispatched the refund application well within the period of limitation, which was expiring on 14.11.2016. Such dispatch on 8.11.2016 is also proved by the fact that the appellant has soon thereafter receipt back of the mail with the remark refused to accept , has again filed the application by hand on 5.12.2011. In this view of the matter, it is held that the refund application has been filed within the limitation as prescribed under Section 102(3) of the Finance Act. Further in view of Section 102(1) and (2) of the Finance Act, the service tax deposited by the appellant has taken the changed character of revenue deposit, by operation of law as the Government of India extended exemption with retrospective effect vide notification no.9/2016-ST read with Section 102 introduced by Finance Act, 2016. Thus, the rejection of refund by Revenue is also hit by Article 265 of the Constitution of India - further it is held that no limitation is applicable for refund in the facts and circumstances of the present case, due to the amount lying with the Revenue having the nature of revenue deposit. The Adjudicating Authority is directed to grant refund within a period of 45 days from the date of receipt of this order along with interest under Section 11 BB - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Refund application rejection on the ground of limitation.
2. Dispute regarding dispatch of refund applications by speed post.
3. Entitlement to refund of service tax paid during the relevant period.
4. Applicability of Article 265 of the Constitution of India.
5. Interpretation of Section 102 of the Finance Act, 1994.

Analysis:
1. The appellant, a construction service provider, claimed refund under Mega Exemption Notification No.25/2012-ST for services provided to Government Authorities. The exemption was extended retrospectively, leading to the refund application. The Revenue raised concerns about the limitation period for filing the refund application, but the appellant argued that the dispatch by speed post on 8.11.2016, returned with "refused to accept," and subsequent filing by hand on 5.12.2016 met the time limit under Section 102(3) of the Finance Act. The Tribunal held that the refund application was within the limitation period, considering the circumstances and the Revenue's refusal, thereby allowing the appeal.

2. The dispute centered around the address mentioned on the envelopes used for dispatching refund applications. The Revenue doubted the date of filing, but the Tribunal found evidence that the applications were dispatched on time. The appellant's argument of presumed service due to postal remarks and subsequent hand filing supported the conclusion that the refund application was not time-barred. The Tribunal emphasized the importance of the circumstances surrounding the dispatch and receipt of the applications in determining the limitation issue.

3. The Tribunal examined the retrospective exemption and Section 102 of the Finance Act, noting that the service tax deposited by the appellant had transformed into a revenue deposit due to the exemption extension. The Tribunal held that the appellant was entitled to the refund of the service tax paid during the relevant period, emphasizing the legal implications of the exemption and the nature of the tax deposit.

4. Article 265 of the Constitution of India, which prohibits the levy or collection of tax except by authority of law, was invoked by the appellant. The Tribunal considered this provision in conjunction with the refund claim, reinforcing the appellant's entitlement to the refund based on the legal framework governing tax collection and exemptions.

5. The Tribunal interpreted Section 102 of the Finance Act, 1994, in light of the appellant's refund claim and the Revenue's objections. By analyzing the provisions related to exemption extensions and refund applications, the Tribunal concluded that the rejection of the refund by Revenue was not tenable under the legal framework established by the Finance Act. The Tribunal's decision was guided by a comprehensive understanding of the statutory provisions and their application to the case at hand.