2018 (1) TMI 561 - AT - Service Tax

Refund claim - time limitation - Section 11B of the Central Excise Act, 1944 - unjust enrichment - Held that - Since Section 11B ibid mandates that the refund claim has to be filed within the prescribed time limit of one year from the relevant date, such time limit has to be strictly adhered to by the statutory authorities functioning under the Central Excise statute - In this case, the refund claim was lodged within the period prescribed u/s 11B and a part thereof is beyond the period of one year. Thus, the refund application filed within one year from the relevant date should be eligible for refund to the appellant. For granting refund within the provisions of Section 11B, doctrine of unjust enrichment will not have any application, inasmuch as, the appellant had paid the service tax on GTA service under reverse charge mechanism. The refund claim filed by the appellant within one year from the relevant date is maintainable and eligible for refund - appeal allowed in part.

Summary

Issues:
Rejection of refund claim on the ground of limitation.

Analysis:
The case involved the rejection of a refund claim based on limitation. The appellant had filed a refund application under Section 11B of the Central Excise Act, 1944, seeking a refund of service tax paid from a specific period. The original authority rejected the claim citing limitation and unjust enrichment. On appeal, the Commissioner (Appeals) upheld the rejection solely on the ground of limitation, without addressing unjust enrichment. The Tribunal considered the case, focusing on the time limit for filing refund claims under Section 11B.

The Tribunal noted that the refund application was filed within the prescribed time limit of one year from the relevant date, as mandated by Section 11B. It emphasized strict adherence to this time limit by statutory authorities under the Central Excise statute. Since the refund claim was lodged within the stipulated period, the appellant was deemed eligible for a refund. The Tribunal clarified that in cases where the payment was made under reverse charge mechanism, the doctrine of unjust enrichment did not apply, as there was no passing on of the tax incidence to others.

The Tribunal referred to precedents set by the Hon'ble Supreme Court in cases like Anam Electrical Manufacturing Co., Doaba Co-Operative Sugar Mills, and Miles India Ltd., emphasizing the importance of following the time limit prescribed under Section 11B for refund applications. It highlighted that statutory provisions should be strictly adhered to, and authorities cannot interpret the law differently. The Tribunal also cited a previous decision where a refund claim was disallowed due to non-compliance with the time limit under Section 11B.

Based on the legal principles established by the Supreme Court and previous Tribunal decisions, the Tribunal concluded that the rejection of the refund application due to limitation was in line with statutory provisions. It dismissed the appeal, stating that the time limit prescribed in Section 11B must be strictly followed for entertaining refund applications, even in cases of erroneous tax payments.

The Tribunal distinguished a previous case relied on by the appellant, stating that it did not analyze the Supreme Court judgments regarding refund claims. It held that the appellant's refund claim filed within one year was maintainable and eligible for a refund, while the claim filed beyond one year was not sustainable. Consequently, the appeal was partly allowed, affirming the rejection based on limitation for the part of the claim filed beyond the one-year limit.