2023 (12) TMI 11 - AT - Service Tax

Refund of excess payment of service tax - refund claim has been rejected primarily on the ground of being much beyond the period of one year as prescribed by Section 83 of the Finance Act, 1994 read with Section 11B of the Central Excise Act - HELD THAT - The law of limitation does not extinguish the right which may have a arisen, but only for the reason of passage of time restricts the enforcement of that right - Admittedly, in the present case the refund claim has been filed much beyond the period of one year as prescribed in law, the same is necessarily time barred as having filed beyond the statutory period of limitation as prescribed in law. Section 83 of Finance Act, 1994 read with Section 11B of Central Excise Act, 1944 prescribes that refund claim should have been filed within one year from the relevant date. This decision of the Hon'ble Supreme Court has been followed constantly by the various courts and tribunal holding that the refund claims filed beyond statutory period of limitation as prescribed by the statute (Section 11B of Central Excise Act, 1944 or Section 27 of the Customs Act, 1962) are barred by limitation. There are no merits in the appeal - appeal dismissed.

Summary

Issues Involved:
1. Timeliness of the refund claim under Section 11B of the Central Excise Act, 1944.
2. Applicability of the principle of unjust enrichment and whether extra payment of service tax constitutes a mere deposit.
3. Whether the refund claim can be entertained despite being filed beyond the statutory period of limitation.

Summary:

1. Timeliness of the Refund Claim:
The appellant filed a refund claim on 09.01.2018 for service tax deposited on 01.06.2016. According to Section 11B of the Central Excise Act, 1944, the refund claim should have been filed on or before 30.05.2017. The Commissioner (Appeals) dismissed the appeal, stating that the refund claim is time-barred as it was filed after more than one year from the date of payment.

2. Applicability of the Principle of Unjust Enrichment:
The appellant argued that the extra payment of service tax is a mere deposit and does not amount to payment of tax, hence the time-limit of Section 11B and the principle of unjust enrichment would not apply. The Commissioner (Appeals) relied on the Supreme Court's decision in Anam Electrical Manufacturing Company and the Tribunal's decision in Prabhakar C. Suvarna Vs. CCE&ST, Mangalore, which held that refund claims must be filed within the prescribed period of one year, even if the payments were made by mistake.

3. Limitation and Enforcement of Refund Claims:
The Tribunal reiterated that the law of limitation restricts the enforcement of rights due to the passage of time. The refund claim in this case was filed much beyond the one-year period prescribed by Section 83 of the Finance Act, 1994, read with Section 11B of the Central Excise Act. The Tribunal referenced the Supreme Court's decision in Mafatlal Industries Ltd vs. Union of India, which emphasized that refund claims must be filed within the statutory period. The Tribunal also noted that the appellant had not refunded the service tax amount to M/s. Umang Realtech Pvt. Ltd., and thus did not bear the burden of excess tax paid.

Conclusion:
The Tribunal upheld the Order-in-Original dated 11.05.2018, rejecting the refund claim of the appellant and dismissed the appeal, emphasizing that the refund claims filed beyond the statutory period of limitation are barred by law.