Question of Unjust enrichment would not arise When Refund Claim is Time barred: CESTAT [Read Order]

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Allahabad Bench held that question of unjust enrichment would not arise when refund claim is time barred.

The appellant, M/s. Krishna Construction Co is a partnership firm engaged in the construction of complex for Government, Local authority or a Governmental authority. The appellant availed exemption from payment of service tax under entry no. 12 of the Notification dated 20.06.2012 in respect of construction service provided to Government or Governmental authority. However, the above exemption was restored on further amendment of the Notification dated 20.06.2012, by insertion of entry no. 12A in the Notification dated 01.03.2016.

Thus, service tax was payable during the period from 01.04.2015 to 29.2.2016 on such services provided to the Government, Local authority or Governmental authority. Subsequently section 102 (1) was introduced by Finance Bill 2016 to provide for retrospective exemption to construction service for the period commencing from 01.04.2015 to 29.02.2016.

The appellant, pursuant to the aforesaid retrospective amendment, filed a refund claim for Rs. 72,96,702/- for the period from 01.04.2015 to 29.02.2016. The Department noticed some defects in the said refund claim and returned the same to the appellant. The appellant re-submitted the completed refund claim.

The appellant filed an appeal before the Commissioner (Appeals), but the Commissioner (Appeals) by order rejected the refund claim on the grounds of limitation and unjust enrichment only.

The Bench consisting of Justice Dilip Gupta, President and P Anjani Kumar, Technical Member observed that “The contention of the Counsel for the appellant that since the limitation period of one year contemplated under section 11B of the Central Excise Act 1944 provides for filing of the claim within one year from the date of payment of tax, the refund claim filed by the appellant should be treated to have been filed within time as it was filed within one year cannot also be accepted for the reason that section 102 (1) of the Finance Act itself provides for a limitation period of six months for filing a refund claim.”

“Once the refund claim is held to be barred by time, the question of unjust enrichment would not arise” the Tribunal ruled.

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