JK Tyre and Industries Ltd Vs Commissioner Central Excise & CGST (CESTAT Delhi)
Summary: The CESTAT, New Delhi Principal Bench dismissed the appeal filed by M/s. JK Tyre and Industries Ltd. against rejection of its refund claim of Rs.22,07,529/-, comprising service tax of Rs.18,73,318/- and interest of Rs.3,34,211/- paid on ocean freight under reverse charge. The appellant manufactures automobile tyres, tubes, flaps and pre-cured tread materials and imports inputs on CIF and FOB terms. During departmental audit for April 2017 to June 2017, the department objected that service tax had not been paid on ocean freight relating to CIF imports, following which the appellant deposited the disputed amount.
The appellant subsequently relied upon the Gujarat High Court decision in SAL Steel Ltd. vs. Union of India, which had held the relevant ocean-freight levy provisions ultra vires, and filed a refund application on 23.09.2020 under Section 83 of the Finance Act, 1994 read with Section 11B of the Central Excise Act, 1944. The refund was rejected as time-barred because Section 11B prescribed a one-year period from the relevant date, and the payment had been made on 24.07.2018. Before the Tribunal, the appellant contended that the amount was an erroneous payment or deposit rather than tax or duty and therefore Section 11B limitation should not apply. Reliance was placed upon Mahindra World City Ltd. and several other decisions.
