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2022 (2) TMI 1170 - HC - Central ExciseRefund of duty paid - deposit was made out of mistake of fact - refund rejected on the ground of time limitation u/s 11B of the Central Excise Act - HELD THAT:- The Hon’ble Karnataka High Court in the case of COMMISSIONER OF CENTRAL EXCISE (APPEALS), BANGALORE VERSUS KVR CONSTRUCTION [2012 (7) TMI 22 - KARNATAKA HIGH COURT] came to the conclusion that section 11B of the Central Excise Act was not applicable to a refund application filed by the petitioner based on mistake of law. The Hon’ble Karnataka High Court fairly held that section 35B(1)(b) was inapplicable. Learned counsel for the petitioner further relied upon the challenge to the said order of the Hon’ble Karnataka High Court before the Hon’ble Supreme Court in case of Commissioner V. KVR Construction [2011 (7) TMI 1334 - SC ORDER]. The Hon’ble Supreme Court dismissed the challenge to the order passed by the Karnataka High Court referred hereinabove and came to hold that the Karnataka High Court had held that the provision of limitation under section 11B of the Central Excise Act, 1944 would not apply for refund of service tax paid by mistake on exempted services even though the assessee had filed claim under Form-R which shows that they had treated such payment as duty but later on claimed it as not a duty. Mere payment of an amount by the assessee and acceptance by the Department would not regularize such an amount as duty if it was not actually payable and paid by mistake. It was further held that writ petition against the order of Commissioner (Appeals) rejecting refund of Service tax paid on exempted services as time-barred, is maintainable and cannot be rejected on the ground of availability of alternate appellate remedy particularly when payment of Service Tax exempted services held not be Tax/duty so as to attract the provisions of Section 11B of Central Excise Act, 1944 and also the provision of Section 35B of the said Act relating to appeal to Appellate Tribunal is not applicable. The issue framed hereinabove is answered in the positive in favour of the petitioner and the appellate authority i.e. the Commissioner of Central Tax (Appeals) is directed to take up the appeal and dispose of the same within a period of 2(two) months from the date of communication of the copy of this order to the authorities concerned - petition disposed off.
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