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September 2014

2014 (35) S.T.R. 77 (Tri.-Mumbai) Jyotsana D. Patel vs. Commissioner of C. Ex., Nagpur

By Puloma Dalal, Jayesh Gogri, Mandar Telang Chartered Accountants
Reading Time 2 mins
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Can refund be claimed of amount paid as service tax by mistake beyond 1 year?

Facts:
The builder had collected and paid service tax on residential unit. However, the Hon’ble High Court in case of K.V.R. Constructions vs. CCE 2010 (17) S.T.R. 6 (Kar.) held that service tax was not leviable on residential unit during the period under consideration. Accordingly, the buyer of residential unit, being ultimate sufferer of service tax filed a refund claim of the amount deposited by builder with service tax authorities. The adjudicating authority sanctioned the refund claim which was appealed by revenue before Commissioner (Appeals). The refund claim was rejected by Commissioner (Appeals) on the grounds that it was barred by limitation. Accordingly, the appellants filed the present appeal before the Tribunal.

Held:
The appellants were not required to pay any service tax on acquisition of residential unit in view of favourable decision delivered by the Hon’ble Karnataka High Court. Therefore, the amount paid by builder did not take colour of service tax and, therefore the provisions of section 11B of the Central Excise Act, 1944, including the time limit of 1 year, are not applicable in the case on hand. Accordingly, the appeal was allowed with consequential relief.

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