2019 (2) TMI 953 - AT - Service Tax

Refund claim denied as time-barred under Central Excise Act Section 11B. Failure to pay tax under protest affects admissibility.

The Tribunal upheld the decision to reject the appellant's refund claim for service tax paid, stating it was time-barred under Section 11B of the Central ... Refund claim - service tax was paid, which the appellant was not required to pay - time limitation - Held that:- The Hon’ble Supreme Court in the case of Porcelain Electrical Manufacturing Co. [1994 (11) TMI 145 - SUPREME COURT OF INDIA] have held that the authorities working under the provisions of the Act are bound by the same and cannot relax the time limit provided under Section 11 B for the refund of erroneously paid duty - the refund claimed by the assessee having no connection with the earlier demand of tax by revenue and the same having being filed beyond the period of one year from the relevant date, stands rightly rejected by the lower authorities as bared by limitation - appeal dismissed - decided against appellant. Issues:1. Service tax liability on commercial training services.2. Refund claim for service tax paid and limitation period.Analysis:Issue 1: Service tax liability on commercial training servicesThe appellant was engaged in providing 'Commercial Training' services, which the revenue claimed were liable for service tax under the category of 'Commercial Training or Coaching Services.' A demand of around &8377; 5.26 crores was raised against the appellant, which was confirmed by the Original Adjudicating Authority. However, the Tribunal, in its Final Order, held that the services provided by the appellant were not taxable. The revenue appealed this decision before the Lucknow Bench of the Allahabad High Court, which rejected the appeal, affirming that the appellant's services were not taxable.Issue 2: Refund claim for service tax paid and limitation periodSubsequent to the Tribunal's decision, the appellant registered and started paying service tax on their activities. However, they did not pay the tax under protest or opt for provisional assessment. After the matter was finalized by the Tribunal and the High Court, the appellant filed a refund claim for &8377; 3,86,51,321/- for the service tax paid between December 2009 to October 2012, claiming it was erroneously paid. The revenue contended that the refund claim was time-barred under Section 11B of the Central Excise Act. The Original Adjudicating Authority and Commissioner (Appeals) denied the claim on the grounds of limitation and unjust enrichment. The appellant argued that the relevant date for the refund claim should be the High Court's order date, and thus, the claim was filed within the prescribed period. However, the Commissioner (Appeals) held that the refund claim was premature, as the demands were sub-judice and the High Court's decision was being challenged before the Supreme Court. The Tribunal upheld the lower authorities' decision, stating that the refund claim had no connection with the earlier demand and was filed beyond the one-year limitation period, thus rejecting the appeal.In conclusion, the Tribunal upheld the decision to reject the appellant's refund claim for service tax paid, stating that it was time-barred under Section 11B of the Central Excise Act. The appellant's failure to pay the tax under protest or opt for provisional assessment impacted the admissibility of the refund claim. The Tribunal emphasized the importance of adhering to statutory time limits for refund claims, as established by previous legal precedents.