2024 (7) TMI 754 - AT - Service Tax

Denial of refund claim of service tax paid - rejection on the grond that the refund claim has been filed beyond the time limit prescribed under 11B of the Central Excise Act, 1944 and the same has been filed after one year from the payment of service tax - HELD THAT - The facts are not in dispute that the appellant paid advance towards purchase of 33 Flats in the year, November-December, 2015 and also paid the service tax on advance. Later on, the booking of the said flats was cancelled on September, 2017 and the builder has returned the amount of advance payment made and did not refund the payment of service tax to the appellant as the builders have no provisions to claim refund of service tax paid by them during the impugned period as the service tax was changed to GST Regime, therefore, the appellant has borne the component of service tax paid thereof. In that circumstances, the appellant has borne the component of service tax and is entitled to claim the refund thereof. Accordingly, the appellant has rightly filed the refund claim. The refund claim has been filed within one year from the date of cancellation of flats. The cause of action arose in this case at the time of cancellation of flats. Therefore, the time limit under Section 11B shall start from the date of cancellation of flats and admittedly the appellant has filed the refund claim within one year thereof. In that circumstances, the refund claim is not barred by limitation. The appellant has not taken cenvat credit of the service tax paid by them and the same has been shown as deemed receivable from the Revenue. In that circumstances, the appellant is entitled for refund claim - the impugne dorder set aside - appeal allowed.

Summary

Issues involved:
Appeal against denial of service tax refund claim due to cancellation of property booking, time limit for filing refund claim under Section 11B of Central Excise Act, entitlement to refund claim based on bearing service tax component, dispute over refund claim filing timeline, consideration of cenvat credit status for refund eligibility.

Analysis:
The appellant appealed against the denial of a service tax refund claim following the cancellation of property bookings. The appellant, engaged in property business, paid service tax on advance for booking 33 flats in 2015, which were later canceled in 2017. The appellant filed a refund claim within one year of the cancellation, contending they had borne the service tax component and not availed cenvat credit. The revenue opposed the claim, citing the limitation under Section 11B as the refund claim was filed after the payment date. The Tribunal considered the submissions and found that the appellant had indeed borne the service tax component, making them eligible for the refund claim. The Tribunal noted that the refund claim was filed within the one-year timeline from the cancellation date, thus not barred by limitation.

The Tribunal observed that the appellant had not taken cenvat credit for the service tax paid, indicating their entitlement to the refund claim. Consequently, the impugned order was set aside, and the appeal was allowed with any consequential relief. The judgment emphasized the appellant's bearing of the service tax component, timely filing of the refund claim, and non-utilization of cenvat credit as key factors in granting the appeal.