Refund claims for service tax remain subject to statutory limitation even when tax was paid under mistake of law.

A refund claim for service tax paid under a mistaken understanding of law remains governed by the statutory refund machinery, including the limitation period under Section 11B of the Central Excise Act as applied to service tax matters. Describing the payment as made under a mistake of law does not exclude the claim from the prescribed time bar. Where the refund application is filed beyond one year, the authorities cannot ignore the statutory limitation, and the claim is not entertainable.

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Issues: Whether a refund claim of service tax paid for an earlier period, filed beyond the prescribed limitation period, could be entertained on the ground that the amount was paid under a mistaken understanding of law.

Analysis: The amount had been voluntarily discharged and remitted as service tax under the Finance Act, 1994, and any claim for return of such amount was governed by the statutory framework applicable to refund. The limitation under Section 11B of the Central Excise Act, 1944, as made applicable to service tax matters, therefore applied. The fact that the assessee described the payment as made under mistake of law did not take the claim outside the statutory limitation. The authorities and the Tribunal could not ignore the prescribed time bar, and the claim, having been filed beyond one year, was not entertainable.

Conclusion: The refund claim was barred by limitation and could not be entertained. The issue was decided against the assessee and in favour of the Revenue.

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