Limitation Period not applicable to Refund Claim of Mistakenly Paid Service Tax: CESTAT
The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Kolkata, has, recently, in an appeal filed before it by an appellant, held that a limitation period will not be applicable to the refund claim of mistakenly paid service tax.
The aforesaid observation was made by the Tribunal when an appeal was filed by the assessee, M/s. Techno Power Enterprises Pvt. Ltd., against the order-in-Appeal dated 27.11.2020, by the Commissioner (Appeals), Guwahati, declining the assessee’s refund claim of the mistakenly paid service tax amount of Rs.46,71,827.
The claim of the appellant is that the service tax was wrongly deposited by it on warehousing services provided by it to one M/s.Haryana State Cooperative Supply and Marketing Federation Limited is refundable, the same being squarely covered under the Negative list of services on which no service tax is payable as per section 66D of the Finance Act, 1994, the Assistant Commissioner is of the view that the said refund claim is barred by limitation of time of one year under section 11B of the Central Excise Act, 1944, as made applicable for the claim of the service tax refund.
With the Commissioner (Appeals), CGST, Guwahati, also rejected the refund claim of the assessee appellant, holding that the said refund claim was not admissible since filed beyond the time limit prescribed under Section 11B, and also on the assessee’s failure to produce reliable evidence to support its claim of refund, ultimately forcing the assessee appellant to prefer the instant appeal before the CESTAT, P.K Choudhary, the Judicial Member of the Tribunal observed:
“I find that the Hon‟ble Supreme Court in the case of Salonah Tea Company Ltd. Etc. v. Superintendent of Taxes, Nowgong & Ors. [1988 (33) ELT 249 (SC)], had held that if there is no provision for realisation of the money under a statute, then the act of payment is ultra vires and such money, if paid, is not paid under such statute and accordingly, the provisions under such statute would not apply. We find that even in the present case, the amount so paid by the Appellant was not payable during the relevant period.
Further, I find that the Hon‟ble Supreme Court in the case of Shri Vallabh Glass Works Ltd. & Anr. v. Union of India & Ors. [1984 (16) ELT 171 (SC)], had held that just as an assessee cannot be permitted to evade payment of rightful tax, the authority which recovers tax without any authority of law, cannot be permitted to retain the amount, merely because the taxpayer was not aware at that time that the recovery was being made without any authority of Law.”
“Since the issue already stands decided, there is no reason to deny the refund claim on the ground of limitation inasmuch as the period of limitation prescribed under Section 11B would not be a bar for the assessee to claim a refund of tax paid under mistake. In so far as the decision of the Apex Court in the case of ITC Ltd (Supra) relied on the Revenue is concerned at this stage of the second appeal, I find that that the same has no relevance in the present appeal since the same was not the subject matter of the Show Cause Notice nor was ever raised before the Commissioner (Appeal). Moreover, the above decision is distinguishable on the facts of the present case”, he added hearing the contentions of both the assessee appellant as well as the Revenue.
Thus, allowing the assessee’s appeal and consequently setting aside the impugned order, the Bench concluded:
“It is observed that the Ld. Commissioner (Appeals) has disputed the claim of refund on the ground that the appellant failed to produce reliable evidence to support the refund claim. In this regard, it is found that no dispute was ever raised in the Show Cause Notice as well as in the Order-in-Original with regard to the documentary evidence for payment of service tax by the assessee. Therefore, the finding made by the Ld. Commissioner (Appeals) has clearly traveled beyond the scope of allegations in the Show Cause Notice since not in dispute. Therefore, the said observation of the Commissioner (Appeals) cannot be legally sustained.”
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