Refund limitation under Section 11B does not apply where service tax was paid despite no tax liability existing.

Service tax paid on inward transportation charges, though not legally payable, was held refundable without being governed by the limitation under Section 11B of the Central Excise Act, 1944. The Tribunal followed the Delhi High Court view that a refund claim arising from payment made in the absence of tax liability is not restricted by the statutory time limit applicable to ordinary duty refunds. On that basis, the rejection of the refund as time-barred was set aside and consequential relief followed for the assessee.

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Issues: Whether the limitation prescribed under Section 11B of the Central Excise Act, 1944 applies to a refund claim for service tax that was not payable.

Analysis: The appellant had paid service tax on inward transportation charges and later sought refund on the ground that such tax was not payable. The Tribunal followed the later decision of the Delhi High Court, which held that where service tax was not required to be paid and was nevertheless paid, the limitation under Section 11B does not govern the refund claim.

Conclusion: Section 11B of the Central Excise Act, 1944 was held inapplicable to the refund claim, and the rejection of refund as time-barred was set aside in favour of the assessee.

Final Conclusion: The refund rejection was quashed and the appeal was allowed with consequential relief.

Ratio Decidendi: A refund claim for tax paid when no tax liability existed is not restricted by the limitation prescribed under Section 11B of the Central Excise Act, 1944.

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