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Refund claim not time-barred, tribunal finds appellant's belief bonafide The tribunal held that the refund claim was not time-barred as it arose from an audit objection and compliance, not at the time of payment of Service Tax. ...
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Refund claim not time-barred, tribunal finds appellant's belief bonafide
The tribunal held that the refund claim was not time-barred as it arose from an audit objection and compliance, not at the time of payment of Service Tax. The appellant's belief in paying tax on 100% gross value was considered bonafide, and the refund claim was filed within one year of the audit objection and compliance. The tribunal set aside the decision rejecting the claim, directing verification of unjust enrichment.
Issues: Time bar for filing refund claim
Analysis: The appellant, engaged in providing Man Power Service, paid Service Tax on 100% of the gross value charged to their client from 01.07.2012 to 31.12.2013. However, audit officers pointed out that the appellant was supposed to pay Service Tax only on 25% as per Notification No.30/2012-ST. The recipient of the service reversed the Cenvat Credit along with interest, recovered from the appellant, leading to a refund claim of &8377;6,94,210. The refund claim was rejected by the adjudicating authority as time-barred since it was filed on 22.02.2015, beyond one year from the date of payment of Service Tax. The Commissioner (Appeals) upheld the decision, leading to the present appeal.
The appellant argued that the refund was not time-barred as it arose from an audit objection raised against the service recipient, leading to the reversal of Cenvat Credit. They contended that the relevant date for the refund claim should be from the date of the audit objection and compliance, within one year of which they filed the refund claim.
The Revenue, however, reiterated that as per Section 11B, the relevant date for the refund claim is only from the date of payment of Service Tax, with no other exceptions provided. They cited various judgments to support their stance.
After considering the submissions, the tribunal found that the main issue was the time bar for the refund claim. It noted that the refund arose due to the audit objection and compliance, not at the time of payment of Service Tax. The appellant paid tax on 100% gross value based on a bonafide belief, and the dispute only arose later. The tribunal held that the relevant date for the refund claim should be from the date of the audit objection and compliance, within which the refund claim was filed. As the claim was filed within one year of this relevant date, the tribunal deemed it not time-barred. The impugned order was set aside, allowing the appeal and directing the adjudicating authority to verify unjust enrichment based on available records.
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