The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad bench has recently held that the refund of service tax cannot be claimed once the same is barred by limitation under section 11B of the Central Excise Act, 1944.
The appellants were aggrieved by the order of the service tax department rejecting the refund of the said amount of service tax paid by them as they were not liable to pay any service tax.
The refund claim was rejected on ground of non-production of evidence or documentary proof that the appellant has not passed the incidence of duty to its customers. The department also found that the refund claim was filed after one year from the date of payment of service tax as specified under Section 11B of the Central Excise Act, 1944 made applicable to service tax under Section 83 of the Finance Act, 1994.
The Tribunal said that “it is difficult to comprehend that as to under what circumstances the provisions of Section 11B of Central Excise Act, 1944 can be invoked to claim the refund. The only provision under Central Excise Act which permits refund is Section 11B of the Act.”
It was further noted that the entire Section 11B relates to refund of duty.
Relying on a catena of decisions, the Tribunal dismissed the appeal filed by the appellant and held that “the decisions relied on by the appellant in his support were passed without appreciating the decision of Honorable Apex Court in the case of Doaba Co-operative Sugar Mills (supra) and in the case of Mafatlal Industries Limited vs. UOI – 1997 (89) ELT 247 (SC). In both these decisions it has been categorically held that refund under Central Excise Act would be governed by Section 11B. In these circumstances, we find that the refund claim filed by the appellant would be governed by the provisions of limitation prescribed under Section 11B of Central Excise Act, 1944. Since the refund was filed after expiry of limitation the same cannot be entertained.”