CESTAT Upholds Rejection of Refund Claim as Time-Barred, Dismisses Appeal Citing Binding Limitation Under S.102 [Read Order]

The Delhi bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has upheld the rejection of a refund claim filed by the assessee, ruling that the application was time-barred under Section 102 of the Finance Act, 2016. The tribunal dismissed the appeal, affirming that the six-month limitation period prescribed by the law was binding and could not be extended, regardless of the merits of the claim. 

The assessee has made an application for a refund of service tax paid on government construction work during the period from April 2015 to December 2015. He based his claim on Section 102 of the Finance Act, which provided retrospective exemption from service tax for such services and allowed refunds for taxes already paid. The assessee’s application, which was filed on 9-2-2017, was rejected by the Assistant Commissioner and later by the Commissioner (Appeals) on the grounds that it was submitted beyond the six-month deadline stipulated under Section 102(3) of the Act. The Finance Act, 2016, received presidential assent on 14-5- 2016, making the deadline for refund applications 14-1–2016. 

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The assessee’s counsel contended that the refund could be claimed within a "reasonable time", citing precedents, and that the tax collected during the exempted period was without legal authority and thus should be refunded irrespective of the time limit.

The tribunal noted that Section 102(3) of the Finance Act explicitly mandated the six-month window and could not be overridden by equitable considerations. 

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The tribunal relied on the Madhya Pradesh High Court’s decision in MDP Infra (India) Pvt Ltd. vs. Commissioner of Customs, Central Excise & CGST, which had similarly upheld the strict application of the six-month limitation. The Supreme Court had later dismissed an appeal against this decision, reinforcing its validity.

The tribunal, comprising Justice Dilip Gupta (President) and P.V. Subba Rao (Member Technical), concluded that the Commissioner (Appeals) had correctly rejected the assessee’s claim as time-barred. The bench dismissed the assessee’s appeal.

To Read the full text of the Order CLICK HERE

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