Service Tax Refund | Date of reversal should be considered as date of payment | Cancellation of Flat Booking

Ramesh Kumar Agarwal Vs Commissioner of Central Excise & Central GST (CESTAT Delhi)

Coming to the plea of issue being barred by time, I hold that no doubt the service tax was deposited by the appellant on 4^th October, 2016 and 24 October, 2016 and the refund claim has been filed on 7^th May, 2018 which is absolutely beyond one year from the date of deposit. But admittedly post the said deposit the circumstances arose due to which the transaction value against which the aforesaid service tax was paid, was got returned to the customer due to sale of the flat being not finalized. The said amount of sale consideration was returned to the customer Shri K.K. Agarwal on 15 October, 2017. It is post this date that the necessity arose to return the amount of Rs.38,250/- also, as was collected from the said customer to discharge the service tax liability of the appellant.

Accordingly, I am of the opinion that the period of one year, in the given facts and circumstances, shall reckon from 15.10.2017 when appellant returned the amount of sale consideration to Shri K.K. Agarwal instead of 04.10.2016. The refund claim filed on 7^th May, 2018 therefore, stands very much within the period of one year. Learned Commissioner (Appeals) is opined to have ignored the peculiarity of facts and circumstances of the present case and is observed to have formed very rigid opinion. The order under challenge is, therefore, liable to be set aside. I draw my support from the decision of CCE, Pune vs. Ispat Profiles India Ltd. reported in 2007 (220) ELT 2018 (Tri.-Mumbai), where it has been held that the date of reversal should be considered as the date of payment giving rise to the cause of action.

In view of entire above discussion, it is hereby held that both the grounds taken by the Commissioner (Appeals) for rejecting the refund claim are held to be against the appreciation of the relevant facts of the present case. The order, accordingly, is hereby set aside. However, the appellant is directed to return the amount to Shri K.K. Agarwal within 15 days of receiving the said amount from the Department against the intimation thereof to the Department. The Department is held at liberty to take appropriate action, in case of non-compliance. Appeal, accordingly, stands allowed.

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