Case Law Details
Issue required to be decided in the present case is whether the refund claim of service tax filed by the assessee after the period of limitation prescribed under the law is to be sanctioned or not, without raising the issue of limitation. The contention of the learned advocate is that as payment of service tax was a mistake, the period of limitation would not apply in such cases. On the other hand, the Revenues contention is that the Tribunal, being a creature of statute has to work within the provisions of law and cannot extend the period of limitation as per the provisions under the law. Further the learned AR relied upon the decision of the Supreme Court in the case of Asst. Collector Vs. Anam Electrical Manufacturing (supra) wherein it was held that statutory time limit is applicable to claim for refund of even illegal levies and time limit cannot be extended by any authority.
Full Text of the CESTAT Order is as follows:-
The present appeal is filed by the Revenue against the impugned order date 31/08/2016/ 18/10/2016 passed by the Commissioner (Appeals) whereby the Commissioner(Appeals) has rejected the appeal of the Department and upheld the Order-in-Original.
2. Briefly the facts of the present case are that M/s. Cannanore Hand loom Exports (respondent) are engaged in the manufacture and export of fabrics and also having service tax registration. The respondent is availing the services of overseas agents for procuring orders and for marketing their products abroad, which is taxable under the category of Business Auxiliary Service. In respect of the services rendered by their overseas agent, the liability for paying service tax is on the recipient of the service in India as per Rule 2(l)(d)(iv) of Service Tax Rules, 1994 read with explanation to Section 65(105). The respondent- assessee filed a refund application on 14/08/2012 for refund of service tax under Section 83 of the Finance Act, 1994 for Rs.4,11,364/-. The respondent/assessee has paid an amount of Rs.19,38,000/- against the service tax payable for the period upto 31st March 2007 for the period from 12/2005 to 03/2007. The adjudicating authority has confirmed the demand by upholding that the respondent is liable to pay the service tax from 18/04/2006 as per the clarification given by CBEC circular date 26/09/2011. Since the assessee has paid more service tax than it was payable, consequently they filed the refund claim which was allowed by the order-in-original. Aggrieved by the said order, Revenue filed appeal before the Commissioner(Appeals) who rejected the appeal. Hence the present appeal.
3. Heard both the parties and perused records.
4. The learned AR for the Revenue submitted that the impugned order passed by the Commissioner(Appeals) is not sustainable in law as the same is passed by ignoring the binding judicial precedent on the same issue. He further submitted that the refund application filed under Section 11B is clearly time barred as the same has been filed on 14/08/2012 whereas the assessee has paid the service tax for the period up to 31/03/2007. He further submitted that the Honorable High Court of P&H in the case of Sarita Handa Exports (P) Ltd. Vs. UOI [2015(321) ELT 434 (P&H)] has held that if the application for refund is filed beyond the prescribed statutory period, then in view of the judgment of the Honorable Supreme Court in the case of Mafatlal Industries Ltd. Vs. UOI [1997(89) ELT 247 (SC)], the same cannot be entertained unless the refund was as a consequence of declaration of a provision as unconstitutional. He further submitted that the judgment of the Honorable P&H High Court was challenged in the Supreme Court by way of a SLP but the same was dismissed and the judgment of the High Court was upheld. He further submitted that the Division Bench of this Tribunal in the case of Prabhakar C. Suvarna Vs. CCE&ST, Mangalore [2015-TIOL-2576-CESTAT-BANG], decided on 22/09/2015, has held that the refund of service tax paid under mistake, the claim has to be filed within prescribed period of one year and the limitation for claiming the refund cannot be extended in any circumstances including when the payments are made by error of law or under mistake. The Division Bench of this Tribunal has relied upon the following decisions:-
i. CCE, Hyderabad-II Vs. XL Telecom Ltd. [2006-TIOL-1982-CESTAT-BANG]
ii. Asst. Collector Vs. Anam Electrical Manufacturing Co. [2002-TIOL-650-SC-CUS]
iii. Mafatlal Industries Ltd. Vs. UOI [2002-TIOL-54-SC-CX-CB]
5. On the other hand, the learned counsel for the assessee defended the impugned order and submitted that the High Court of Bombay in the case of Indian National Shipowners Association Vs. UOI [2009(13) STR 235] has held that the service recipient in India is liable to pay service tax for the services received from abroad only from 18/04/2006 after enactment of Section 66A of the Finance Act, 1994. He further submitted that Honorable Supreme Court dismissed the SLP filed by the UOI against the judgment of the Bombay High Court and thereafter the CBEC vide order date 26/09/2011 clarified that service tax liability on any taxable service provided by a non-resident or a person located outside India to a recipient in India would arise w.e.f. 18/04/2006 only. He also submitted that the respondent had filed the refund claim for Rs. 4,11,364/- but the original authority had only granted Rs.3,29,633/-.
6. After considering the submissions of both the parties and perusal of material on record, I find that the issue required to be decided in the present case is whether the refund claim of service tax filed by the assessee after the period of limitation prescribed under the law is to be sanctioned or not, without raising the issue of limitation. The contention of the learned advocate is that as payment of service tax was a mistake, the period of limitation would not apply in such cases. On the other hand, the Revenues contention is that the Tribunal, being a creature of statute has to work within the provisions of law and cannot extend the period of limitation as per the provisions under the law. Further the learned AR relied upon the decision of the Supreme Court in the case of Asst. Collector Vs. Anam Electrical Manufacturing (supra) wherein it was held that statutory time limit is applicable to claim for refund of even illegal levies and time limit cannot be extended by any authority. On the other hand, the learned counsel for the assessee relied upon the following decisions:-
i. Geojit BNP Paribas Financial Services [2015(3)KLT SN 41 (C.No.54)]
ii. KVR Construction [appeal no.2992-93/2009 of Karnataka High Court dt. 18/11/2010]
iii. KVR Construction [2010(28) VST 190 (Kar.)]
iv. Natraj and Venkat Associates [2010(28) VST 525 (Mad.)]
v. Hind Agro Industries Ltd. [2008(221) ELT 336 (Del.)]
7. After considering the submissions of both the parties, I find that the impugned order is not sustainable in law as the same is contrary to the decisions of the Honorable Supreme Court in the case of Anam Electrical Manufacturing Co., cited supra and also the decision of the P&H High Court in the case of Sarita handa Exports (P) Ltd. which was upheld by the Supreme Court also. In view of these decisions, I am of the view that the impugned order is not sustainable and I set aside the same by allowing the appeal of the Revenue.
