2023 (7) TMI 582 - AT - Service Tax

Refund of Service Tax paid - time limitation - rejection on the ground that refund application has been filed after a period of more than 22 months thus becoming time-barred - prospective or retrospective effect of N/N. 04/2014-ST dated 17.02.2014 - HELD THAT - All cases of refund of Service Tax is to be dealt with in terms of the statutory provisions of section 11 B of the Central Excise Act, 1944 as the said provision has been made applicable in relation to service tax through Section 83 of the Finance Act, 1994. The said legal provisions specify the period within which any refund application is required to be filed and how the refund application would be dealt with - The plain reading of the legal provisions of Section 11B, amply makes it clear, that any refund of excise duty/service tax can be entertained only in terms of sub-section (1) of Section 11B and any refund shall be made strictly in terms of sub-section (2) of Section 11B of the said Act. Accordingly, any person claiming refund is required to file the refund application in the prescribed manner and within one year from the relevant date as provided under the Explanation clause (B). It is not the case of the appellant that the service tax was paid under protest, in which case the one year time limit does not apply. The relevant date for the purpose of this case, in which the appellant have voluntarily paid the short payment of service tax, is the date of payment of duty/ tax - In the present case, since the refund claim has been filed for the total payment of service tax of Rs. 1,06,62,609/- which covers the payment made on 25.03.2014, 29.03.2014, 25.11.2014, it is found that the refund claim filed on 23.02.2016 for these payments were beyond the prescribed period of one year. Further, there is/are no separate refund application(s) with breakup detail in respect of payments made on 07.04.2015, 01.09.2015, 11.09.2015 and 01.10.2015 for entertaining these as having been filed within one year time period. Hence, on the limited angle of time limit, the refund application is not maintainable in terms of Section 11B of the said Act as made applicable in relation to Service Tax. Central Board of Indirect Taxes and Customs had issued a circular No.177/03/2014-Service Tax dated 17.02.2014, clarifying that services by way of transportation of rice by rail or a vessel from one place in India to another is exempt as foodstuff includes rice . Hence, the services provided for transportation of rice by rail is exempt from 26.06.2012 and the same has been clarified in the above referred circular issued subsequently - the taxable services under the head cargo handling services were not exempt during the disputed period. The Commissioner of CGST Central Excise, Raigad in the impugned order has discussed these aspects before coming to a conclusion at paragraphs 18, 19 and 22, which is the correct interpretation of the law. Reopening of completed proceedings - HELD THAT - The service tax short paid as has been identified in the DGCEI investigation proceedings, which was voluntarily paid by the appellants, have been specifically closed at the request of the appellants. Hence it is not feasible to reopen the completed proceedings particularly when the same has attained deemed conclusion of the demand proceedings in respect of service tax, interest and penalty under section 78 of the Finance Act 1994. Both on time limit and on merits the appeal filed by the appellants does not sustain - there are no grounds made by the appellants for interfering with the order passed by the first appellate authority - Appeal dismissed.

Summary

Issues Involved:
1. Time-barred Refund Application.
2. Eligibility of Service Tax Exemption on Merits.

Issue 1: Time-barred Refund Application

The appellant, M/s. Arshiya Rail Infrastructure Limited, filed a refund claim on 23.02.2016 for service tax paid, arguing it was within one year from the last payment date of 01.10.2015. However, the original authority rejected the claim as time-barred, stating it was filed after more than 22 months from the initial payments made on 25.03.2014, 29.03.2014, and 25.11.2014. The Tribunal upheld this view, referencing Section 11B of the Central Excise Act, 1944, which mandates that refund applications be filed within one year from the relevant date, unless paid under protest, which was not the case here. Therefore, the refund claim was not maintainable on the grounds of time limitation.

Issue 2: Eligibility of Service Tax Exemption on Merits

The appellant claimed exemption under Notification No. 25/2012-Service Tax dated 20.06.2012, which exempts transportation of rice by rail as "foodstuff." They also cited CBIC circular No.177/03/2014-Service Tax dated 17.02.2014, which clarified that rice is included as foodstuff. However, the Tribunal noted that the exemption for services related to loading, unloading, packing, storage, or warehousing of rice was only introduced with Notification No. 04/2014-Service Tax dated 17.02.2014, and thus not applicable retrospectively for the disputed period of October 2012 to March 2013. The Tribunal found that the appellant's services were taxable under "cargo handling services" and upheld the original authority's interpretation that the exemption did not apply for the period in question.

Conclusion:

The Tribunal concluded that the appeal did not sustain on both time limit and merits. The service tax, interest, and penalty paid voluntarily by the appellants during the DGCEI investigation were deemed concluded and could not be reopened. Thus, the appeal was dismissed, and the impugned order by the Commissioner of Central GST & Central Excise, Raigad, was upheld.

(Order pronounced in open court on 13.07.2023)