2023 (2) TMI 100 - AT - Service Tax

Refund of excess service tax paid - time limitation - denial on the ground of limitation when the limitation period has expired after the introduction of CGST Act - HELD THAT - A perusal of the orders of both the authorities below give the impression that very less attention have been paid to the documents submitted by the appellants in support of their claim of excess payment and the authorities mainly concentrated on the issue of time bar as laid down under Section 11B ibid. The excess payment has been made by the appellants in the month of August, 2017 for the period April, 2017 to June, 2017 and the refund claim has been filed in the month of October, 2018. Admittedly Central Goods Service Tax Act was introduced w.e.f. 1.7.2017 replacing the erstwhile existing Act and Rules. Section 142(5) of the new Act makes the assessee eligible to file refund claim and to get the refund of the amount of service tax paid by them in cash notwithstanding anything to the contrary contained under the provisions of existing law other than the provisions of sub-section (2) of Section 11B of the Central Excise Act, 1944. The said provision expressly prescribed that the limitation provided in sub-section (1) of Section 11B is not applicable. The authorities below did not pay much attention to the documents placed on record by the appellants and they had merely given the findings on it without discussing in details about the documents placed on record by the appellant before them, therefore I do not want to comment about the admissibility or otherwise of the documents placed on record by the appellants in support of their claim. In my view it has to be done by the authorities below. The refund claim filed by the appellants are within limitation therefore for the purpose of verification/ eligibility of documents and also for calculating the eligible refund claim, the matter is remanded back to the Adjudicating Authority as this exercise needs to be done by the said authority and if the said authority find the appellants eligible for refund after verifying the documents then they are under obligation to grant cash refund of the amount to be refunded to the appellants in terms of Section 142(3) ibid. Appeal disposed off.

Summary

Issues Involved:
Whether the refund of excess service tax paid by the appellants can be denied on the ground of limitation post the introduction of CGST Act?

Analysis:
The appeals challenged the Orders dated 29.3.2019 passed by the Commissioner (Appeals), GST, C.Ex. & Customs, Nagpur, rejecting the refund claims of the appellants. The issue revolved around the denial of refund due to the expiration of the limitation period post the introduction of the CGST Act.

The appellants, Maloo Enterprise and Maloo Infraspace, had paid excess service tax for the period April, 2017 to June, 2017. Maloo Enterprise paid Rs. 16,93,021/- twice inadvertently and erroneously paid Rs. 7,58,491/-, while Maloo Infraspace paid Rs. 7,58,491/- instead of Rs. 1,45,098/-. Both filed refund claims for the excess amounts paid.

Show cause notices were issued, proposing to reject the refund claims on the grounds of non-filing of relevant documents and time bar. The Adjudicating Authority rejected the claims, which were upheld by the Commissioner (Appeals).

The counsel for the appellants argued that they were eligible for refund under Section 142(3) & (5) of CGST Act, 2017. They contended that the excess tax paid was a genuine error, not related to legal interpretations, making them eligible for adjustment under Rule 6(4A) of Service Tax Rules, 1994.

The Tribunal observed that the authorities had focused more on the time bar under Section 11B, neglecting the documents submitted. The introduction of the CGST Act allowed for cash refunds under Section 142(5), irrespective of the limitations of the previous law. Refund claims were held to be within time, supported by precedents and the language of Section 142(5).

The Tribunal remanded the matter to the Adjudicating Authority for a detailed review of the documents and calculation of the eligible refund. The Authority was instructed to grant a proper opportunity for a hearing and adhere to the principles of natural justice.

In conclusion, the appeals were disposed of with the direction for a reassessment by the Adjudicating Authority to determine the eligibility for cash refunds in accordance with Section 142(3) of the CGST Act, 2017.