2023 (3) TMI 1013 - AT - Service Tax

Refund claim - time limitation - whether the appellants refund filed after one year from the relevant date is hit by limitation in terms of Section 11B of Central Excise Act, 1944? HELD THAT - From the proviso under Section 11B(1), the period of one year will not apply if the assessee paid duty under protest. In the present case also, it is not in dispute that service tax was paid under protest therefore, the limitation of one year is prima-facie not applicable. However, before the Adjudicating Authority the appellant have not produced the letter under protest dated 25.06.2007, the learned Commissioner (Appeals) also rejected the submissions of the appellant regarding this under process letter on the ground that it is an after-thought as the same was not produced before the original authority. This letter is of dated 25.06.2007 and it cannot be said that it is an after-thought. Learned Commissioner (Appeals) should have considered this letter and passed a reasoned order on this issue which he fails to do so. Since the letter was produced before the Adjudicating Authority, the matter should be remanded to the Adjudicating Authority to pass a fresh order after considering the under protest letter dated 25.06.2007. The appeals are allowed by way of remand to the Adjudicating Authority.

Summary

Issues involved:
The issue involved in the present case is whether the appellant's refund filed after one year from the relevant date is hit by limitation in terms of Section 11B of Central Excise Act, 1944.

Comprehensive Details:

1. Background and Refund Claim:
The appellant believed their services related to export of goods were not taxable and began paying service tax under protest. A refund claim was filed after the relevant date, which was rejected by the sanctioning authority citing time limit under Section 11B. The Commissioner (Appeals) also rejected the claim, stating the under protest letter was an after-thought as it was not submitted before the Adjudicating Authority.

2. Argument for Refund:
The appellant's counsel argued that despite the late filing, the service tax was paid under protest from the beginning, as declared in a letter dated 25.06.2007. The counsel referenced the proviso to Section 11B, which exempts the one-year limitation if duty is paid under protest. The counsel contended that the letter clearly established the appellant's protest payment.

3. Tribunal's Decision:
The Tribunal disagreed with the Commissioner (Appeals) regarding the under protest letter, stating it was not an after-thought and should have been considered. As the letter was produced before the Adjudicating Authority, the Tribunal remanded the matter for a fresh order considering the under protest letter dated 25.06.2007. The impugned orders were set aside, and the appeals were allowed for remand to the Adjudicating Authority.

Conclusion:
The Tribunal's decision highlighted the importance of considering protest payments in refund claims under Section 11B of the Central Excise Act, 1944. The case serves as a reminder of the significance of documenting protest payments and their impact on refund timelines.