Tribunal allows refund claim for 'Liaisoning Services' exempt from Service Tax

The Tribunal held that the 'Liaisoning Services' provided were not subject to Service Tax during the relevant period. The refund claim was deemed not time-barred under Section 11B as the amount deposited was not a tax but a mistaken deposit. The deposited amount was not considered as Service Tax, and the principle of unjust enrichment did not apply. Consequently, the Tribunal allowed both appeals, directing the Commissioner to refund the deposited amount, stating that the limitation under Section 11B did not apply.

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Issues Involved:
1. Whether the 'Liaisoning Services' provided by the assessee-Appellants were subject to Service Tax.
2. Whether the refund claim filed by the assessee-Appellants was time-barred under Section 11B of the Central Excise Act, 1944.
3. Whether the amount deposited by the assessee-Appellants can be considered as a deposit or tax.
4. Whether the principle of unjust enrichment applies in this case.

Issue-wise Detailed Analysis:

1. Whether the 'Liaisoning Services' provided by the assessee-Appellants were subject to Service Tax:
The assessee-Appellants were registered for providing "Business Auxiliary Service" under Section 65 of the Finance Act, 1994 and were providing liaisoning services to M/s Dongfang Electric Corporation, China. During the period under consideration (01.06.2005 to 31.01.2007), these services were not subject to Service Tax. The Tribunal noted that "the assessee-Appellants had provided the 'Liaisoning Services', which were not subject to Service Tax as per the Finance Act, 1994."

2. Whether the refund claim filed by the assessee-Appellants was time-barred under Section 11B of the Central Excise Act, 1944:
The refund claim was initially rejected by the lower authorities as time-barred under Section 11B. However, the Tribunal observed that the amount deposited was not towards a tax but merely a deposit made by mistake or under pressure. Hence, Section 11B was not applicable. The Tribunal cited several case laws, including *Mera Baba Realty Associate (P) Ltd. vs Commissioner of Service Tax, Delhi*, where it was held that the one-year limitation under Section 11B does not apply when the collection is without authority of law. The Tribunal concluded that "the claim has been made within the period of three years prescribed by Hon'ble Delhi High Court."

3. Whether the amount deposited by the assessee-Appellants can be considered as a deposit or tax:
The Tribunal determined that the amount deposited by the assessee-Appellants could not be considered as Service Tax. It was noted that "mere payment of amount would not make it a Service Tax payable by them." The Tribunal emphasized that "the amount deposited by the assessee-Appellants by mistake/good faith cannot be termed as 'Tax'."

4. Whether the principle of unjust enrichment applies in this case:
The Tribunal found that there was no unjust enrichment as the amount was paid from the assessee-Appellants' own pocket and not recovered from DEC, China. The Tribunal cited the Chartered Accountant's certificate and an affidavit from the Director of the assessee-Appellants' company confirming that no Service Tax was charged in the invoice raised on DEC, China. The Tribunal stated, "no case of unjust enrichment is made out."

Conclusion:
The Tribunal concluded that the amount deposited by the assessee-Appellants was not a tax but a deposit made under a mistaken notion. Therefore, the limitation under Section 11B of the Central Excise Act, 1944 did not apply. The Tribunal set aside the impugned orders and directed the jurisdictional Commissioner to return the deposited amount, stating, "we are of the view that the assessee-Appellants are entitled to get the refund and the same is not hit by the limitation prescribed under Section 11B of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994." Both appeals filed by the assessee-Appellants were allowed.

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