August 2016
[2016] 70 taxmann.com 303 (Mumbai-CESTAT) – Giriraj Construction vs. Commissioner of Central Excise & Customs, Service Tax, Nasik.
By Puloma Dalal, Jayesh Gogri, Mandar Telang; Chartered Accountants
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Refund cannot be granted if the claim is filed beyond time limit set out in section 11B, irrespective of whether such refund claim pertains to amount mistakenly paid as duty/ tax or amount correctly paid as duty/tax.
Facts
The Appellant mistakenly paid service tax in respect of certain services provided by it but which were not liable to service tax. A refund claim in respect of such mistaken services was filed after one year from relevant date. When revenue rejected refund claim as unsustainable being time barred, Appellant contended that since the service to which the refund claim relates as not liable for service tax, service tax paid by them was without authority of law and hence, time limit of one year as prescribed u/s. 11B of the Central Excise Act, 1994 would not be applicable to refund claim filed by the Appellant. Revenue submitted that in various judicial pronouncements, it has been categorically held that refund of any amount is governed by the provisions of section 11B in absence of any other provision dealing with refund claims.
Held
The Tribunal held that it would not be correct to state that section 11B is not applicable in cases, where the applicant has paid service tax although there was no levy. In every case of refund, the refundable amounts are neither service tax nor excise duty and such amount becomes refundable only where it is not payable as per law and therefore, every such amount shall be treated as payment without authority of law. At the time of payment the assessee pays the amount under a particular head such as service tax, excise duty etc. and when subsequently it is found that this amount is not payable, the same amount stand refundable to the assessee and such refund is treated as refund of service tax/duty only. Therefore, for the purpose of claiming refund of such amount of service tax, section 11B of the Central Excise Act read with section 83 of the Finance Act 1994 is the only provision and the amount claimed for refund by the Appellant can be refunded only under that section, the limitation provided therein also would apply. Any other interpretation would make section 11B redundant. Relying upon the various decisions of Supreme Court and Hon’ble Bombay High Court, the Tribunal disallowed the claim.
(Note: Readers may note a similar decision in the case of Benzy Tours & Travels (P) Ltd vs. CST [2016-TIOL-1104-CESTAT – MUM] reported in the June 2016 issue of BCAJ.
