Statutory time limit is applicable to claim of refund of service tax paid mistakenly

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.