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2022 (6) TMI 612 - AT - Service TaxRefund of excess paid service tax - amount paid under mistake of law - claim rejected as the same has been filed after one year of the deposit invoking section 11 B of Central Excise Act, 1944 - HELD THAT - It is observed that there is no denial on part of the Department about claim of appellant that the amount of Rs.2,83,505/- is an excess payment than the amount of tax to be deposited by the appellant. Consequently, it becomes clear that the amount is not the amount as would have been authorized by law. The adjudicating authority while denying the refund of said excess amount has invoked section 11B of Central Excise Act 1944. The bare perusal makes it clear that the Section applies for the refund of such amount which is an amount of duty or tax. As already observed amount in question is in the form of deposit. The issue is no more res-integra as has already been decided by this Tribunal in the case of R.S. CHEMICALS VERSUS COMMISSIONER OF CENTRAL EXCISE, NOIDA 2017 (4) TMI 884 - CESTAT ALLAHABAD where it was held that the amount excess paid in December, 2003 is in the nature of Revenue deposit. Further, there is no limitation for refund of Revenue deposit - the refund claim is not barred by limitation. Even the decision of Hon ble Apex Court in MAFATLAL INDUSTRIES LTD. VERSUS UNION OF INDIA 1996 (12) TMI 50 - SUPREME COURT , as has been relied upon by Commissioner (Appeals) has, while distinguishing the cases of refund into three broad categories, has clarified that in cases where the levy of a tax has been held to be (1) unconstitutional; or (2) void for want of inherent jurisdiction, it is open for the assessees to take advantage of the declaration of the law so made and claim refunds on the ground that they paid the tax under a mistake of law. This is because such claims are outside the ambit of the Excise Act. The limitation of section will not be applicable. Commissioner (Appeals) has wrongly applied the obiter-dicta of Mafatlal Industries case - Refund accordingly is held to have been wrongly rejected - appeal allowed - decided in favor of appellant.
Issues:
Challenge to rejection of refund claim based on limitations under section 11B of Central Excise Act, 1944. Analysis: The appeal was filed to challenge the Order-in-Appeal upholding the rejection of a refund claim by the appellant on the grounds of limitations. The appellant had claimed to have deposited an excess amount of Rs.2,83,505 as Service Tax inadvertently on 04.03.2015. An application seeking a refund was filed on 6th August, 2018, after realizing the excess payment. The original adjudicating authority rejected the claim on 24.06.2021, citing section 11B of the Central Excise Act, 1944, due to the claim being filed after one year of the deposit. The appellant contended that the amount deposited was found to be in excess of their liability and should not be considered as tax or duty, hence section 11B should not apply. The appellant relied on various case laws to support their argument. During the hearing, the appellant's counsel argued that the excess amount deposited was not tax or duty but an amount in excess of the liability, thus section 11B should not be invoked. The Department, however, relied on the order under challenge and cited legal precedents, including the case of Mafatlal Industries Ltd. vs. Union of India. After considering the contentions and records, it was observed that the amount in question was an excess payment and not an authorized amount of duty or tax. Section 11B applies to refund claims of duty or tax, not deposits. The Tribunal referred to previous decisions, including R.S. Chemicals case, and clarified that in cases where a tax levy is held unconstitutional or void, claimants can seek refunds under different grounds, not subject to the limitation of section 11B. Consequently, the Tribunal held that the Commissioner (Appeals) wrongly applied the principles of the Mafatlal Industries case and set aside the rejection of the refund claim. The appeal was allowed, and the order was overturned, granting consequential relief to the appellant.
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