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2025 (3) TMI 1102 - AT - Service TaxRefund of service tax on account of retrospective exemption from payment of Service Tax being accorded by Section 102 of the Finance Act 2016 with effect from 14.05.2016 - refund claim barred by time limitation or not - HELD THAT - The order of the Ld. Commissioner (Appeals) dated 10.09.2021 wherein DG MAP was directed to file the refund claim before the adjudicating authority within a period of one month has attained finality as the said order has been affirmed by the Hon ble Calcutta High Court. Accordingly the refund claim has been filed by the Respondent No. 2 within one month in compliance of the order of the Ld. Commissioner (Appeals) dated 10.09.2021. Therefore the refund claim filed by the Respondent No. 2 is not barred by limitation. In these circumstances there are no infirmity in the impugned order. Conclusion - The Respondent No. 2 viz. DG MAP is entitled to the claim of refund of Service Tax paid by them to the Respondent No. 1 which is not payable and the same shall be sanctioned to the Respondent No. 2 within a period of one month from the date of receipt of this order. Appeal of Revenue dismissed.
ISSUES PRESENTED and CONSIDERED
The core legal questions considered in this judgment are:
ISSUE-WISE DETAILED ANALYSIS Issue 1: Limitation under Section 102(3) of the Finance Act, 1994 Relevant legal framework and precedents: Section 102(3) of the Finance Act, 1994 prescribes conditions under which a refund claim can be considered, including time limitations. Court's interpretation and reasoning: The Tribunal found that the limitation condition under Section 102(3) did not apply in this case. The order of the Commissioner (Appeals) dated 10.09.2021, directing DG MAP to file the refund claim within one month, had attained finality as it was affirmed by the Calcutta High Court. Consequently, the refund claim filed by DG MAP was within the prescribed time frame. Application of law to facts: The Tribunal noted that DG MAP complied with the directive to file the refund claim within one month of the Commissioner (Appeals)' order, thus the claim was not barred by limitation. Issue 2: Principle of Unjust Enrichment Relevant legal framework and precedents: The principle of unjust enrichment, as per Sl. No. (d) of the proviso to Section 11B(2) of the Central Excise Act, 1944, prevents the claimant from receiving a refund if they have passed on the tax burden to another party. Court's interpretation and reasoning: The Tribunal determined that the tax burden was borne by DG MAP, as they paid the Service Tax to the Respondent No. 1. Therefore, DG MAP is entitled to the refund, as they did not pass on the tax burden to any other party. Key evidence and findings: It was established that DG MAP had paid the Service Tax, and thus, they were the rightful claimant for the refund. Application of law to facts: Given that DG MAP bore the tax burden, the principle of unjust enrichment did not apply, and they were entitled to the refund. Issue 3: Entitlement to Refund Due to Retrospective Exemption Relevant legal framework and precedents: Section 102 of the Finance Act, 2016 provides a retrospective exemption from Service Tax for certain services related to construction of Government buildings. Court's interpretation and reasoning: The Tribunal noted that the retrospective amendment exempted the Service Tax paid by DG MAP during the relevant period. As a result, DG MAP was entitled to a refund of the Service Tax paid. Application of law to facts: The Tribunal applied the retrospective exemption provision to the facts, concluding that DG MAP's claim for a refund was valid. SIGNIFICANT HOLDINGS Preserve verbatim quotes of crucial legal reasoning: "We find that the refund claim filed by the Respondent No. 2 is not barred by limitation... the tax has been borne by the Respondent No. 2, the Respondent No. 2 is entitled to claim refund of the said Service Tax paid by them, which was not payable as per the retrospective amendment in the Finance Act by virtue of Section 102 of the Finance Act, 2016 during the impugned period." Core principles established: The Tribunal established that compliance with a directive from a higher appellate authority regarding the timing of a refund claim filing can override statutory time limitations. Additionally, the principle of unjust enrichment does not apply when the claimant has borne the tax burden. Final determinations on each issue:
The appeal filed by the Revenue was disposed of with the Tribunal directing that the refund be sanctioned to DG MAP within one month from the date of receipt of the order.
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