Refund of Service Tax paid allowable based on Challans showing date of payment within one year: CESTAT [Read Order]

The Mumbai Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that the refund of service tax paid is allowable based on challans showing the date of payment within one year.

M/s JSW Dharamtar Port Pvt. Ltd., the assessee challenged the order confirming the rejection of the refund claim in part to the tune of Rs.30,94,725/- erroneously paid by the Appellant as service recipient of service by way of construction, erection, commissioning or installation of original works about Port, which was exempted from service tax.

Service Tax was collected from the Appellant by M/s. Paresh and deposited by it in respect of construction service about port rendered to Appellant that was originally exempted from payment of Service Tax vide Mega exemption Notification No. 25/2012-ST at Sr. No. 14(a), but was temporarily withdrawn vides Notification dated 01.03.2015 and restored w.e.f. 01.03.2016 by way of insertion of Sr. No. 14A Notification No. 09/2016-ST dated 01.03.2016. 

The Appellant continued to pay the Service Tax collected and paid through its service provider M/s. Paresh and after realising that no Service Tax was infected payable from the period between 01.04.2015 to 29.02.2016 that was refundable, the Appellant, claimed for a refund through its application dated 27.06.2017 but the said refund claim was rejected by Order-in original dated 13.02.2018 on the ground that only M/s. Paresh, who deposited the tax, can file the refund application and the refund up to 29.02.2016 was hit by the limitation of six months prescribed in the amended Finance Act, 2016. 

On appeal, the Commissioner (Appeals) confirmed the rejection of the refund that was time-barred in terms of Section 103 of the Finance Act for the period from 01.04.2015 to 29.02.2016 and remanded the matter back to the Adjudicating Authority to verify relevant documents of the Appellant.

It was observed by the bench that the relevant provision contained in Rule 11B of the Central Excise Act reveals that in the case of a person, other than the manufacturer, the date of purchase of goods would be the relevant date to determine the period of limitation.  The Appellant had not purchased any goods but availed services and it had borne the incidence of tax. 

The CESTAT bench consisting of  Dr Suvendu Kumar Pati, a member (judicial)  observed that for determination of limitation the relevant date for the Appellant would fall within the definition of sub-clause (f) of Section 11(5)(B) of the Central Excise Act, for which the date of payment is material. 

The Tribunal held that the Appellant is entitled to get a refund against all those taxes paid erroneously, whose challans were showing the date of payment within one year from the date of filing of refund application on dated 27.06.2017. 

The appeal was allowed in part and the bench set aside the order passed by the Commissioner of Central Tax.  Shri Abhishek Deodhar, Advocate appeared for the Appellant and Shri S.B.P. Sinha, Superintendent, Authorised Representative appeared for the Respondent.

To Read the full text of the Order CLICK HERE

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