McCann Erickson (India) Pvt. Ltd. Vs Commissioner of CGST & CX GST (CESTAT Delhi)
In this case, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Delhi examined an appeal filed against an order rejecting a refund claim of ₹2,93,72,118/- on the ground of limitation under Section 11B of the Central Excise Act, 1944.
The appellant, engaged in providing advertising agency services under the Finance Act, 1994, had discharged service tax liability on a monthly basis. However, from January 2017 onwards, the appellant paid service tax without adjusting previously paid amounts for earlier tax periods, resulting in excess payment. Additionally, excess tax of ₹23,30,533/- was paid in cash during March and April 2017, which was not adjusted against future liabilities. A refund application was filed on 09 January 2020 for the total excess amount. The Department rejected the claim as time-barred and for lack of documentary evidence to establish non-utilization of excess tax.
The adjudicating authority rejected the refund on the ground that it was filed beyond the one-year limitation prescribed under Section 11B. This finding was upheld by the Commissioner (Appeals).
The appellant contended that the excess payment was not “tax” in the legal sense and therefore the limitation under Section 11B was not applicable. It was argued that such excess payment, made inadvertently or under a mistake, assumes the character of a deposit and cannot be retained by the Department. Reliance was placed on various judicial precedents, including decisions holding that limitation does not apply where tax is paid under mistake of law. It was further submitted that similar refund claims had been allowed in the appellant’s own case by Maharashtra appellate authorities, emphasizing the need for consistency in departmental approach.
