Refund limitation under section 104(3) is directory where the statutory scheme requires section 11B refund machinery to apply.

The Tribunal held that the refund mechanism for service tax collected on one-time development charges must be read harmoniously with the general refund procedure under section 11B of the Central Excise Act, through section 83. It treated the six-month time-limit in section 104(3) as directory, not an absolute bar, because a beneficial refund provision should not be construed to defeat the substantive refund right. It further held that the limitation under section 11B had to be computed from 01.04.2017, and remanded the matter to the adjudicating authority to verify limitation and grant refund if otherwise in time.

---

---

Issues: Whether the time-limit prescribed under section 104(3) for refund of service tax collected on one-time development charges was mandatory or directory, and whether the refund claim had to be examined with reference to section 11B of the Central Excise Act, 1944.

Analysis: The special refund provision under section 104 was held to be connected with the general refund machinery under section 11B through section 83, so that the refund procedure under section 11B continued to apply. The Tribunal treated the six-month limit in section 104(3) as not operating as an absolute bar in the circumstances, holding that a beneficial refund provision should not be construed so as to defeat its purpose. It further held that the one-year limitation under section 11B of the Central Excise Act, 1944 had to be reckoned from 01.04.2017, the date on which Presidential assent was received.

Conclusion: The limitation in section 104(3) was held to be directory, the refund claim was to be tested under section 11B, and the matter was remanded to the adjudicating authority for verification of limitation and consequential grant of refund, if otherwise in time.

Ratio Decidendi: A special refund provision meant to grant a statutory benefit must be construed harmoniously with the general refund provisions, and its procedural time-limit will not defeat the substantive refund right where the scheme itself depends on the broader refund machinery.

---