2019 (12) TMI 1092 - AT - Service Tax

Tribunal Grants Refund: Time Limits Don't Apply to Service Tax Paid in Error, Overturns Commissioner's Decision.

M/s Aryas Grains Pvt Ltd. Versus Commissioner of Central Excise, Service Tax, Raipur

The Tribunal overturned the Commissioner's decision, allowing the appellant's refund claim for service tax paid under a mistake of law. It determined that ... Refund of service tax wrongly paid - refund was rejected on the ground of time limitation - Section 11B read with provisions of Section 83 of the Finance Act - appellant have paid service tax on GTA under the reversed charged mechanism in respect of transportation of rice from their rice mill to the godown of Food Corporation of India from the period 2015-16 and 2016-17, the service is exempted under the Notification No. 25/2012-ST dated 26.06.2012 as amended. HELD THAT: - Admittedly, the duty in this case has been paid under the mistake of law as the appellant is engaged in transportation of agriculture products, which is rice, that is exempted by the Notification No.25/2012 dated 26.6.2012. The appellant has paid the service tax under the mistake of law. The issue is settled in favour of the appellant by the Hon’ble Supreme Court in case of ITC [1993 (7) TMI 75 - SUPREME COURT] and also by the decision of this Tribunal in case of Ambiance Hospitality [2018 (12) TMI 1112 - CESTAT NEW DELHI] The decision of Hon’ble Supreme Court in case of Doaba Cooperative Sugar Mills, [1988 (8) TMI 103 - SUPREME COURT] is not identical to the case at hand. In this case it was the question of refund of duty and it is the provisions of Section 28 of the Customs Act prescribed have rightly been upheld by the Supreme Court. Therefore, this decision distinguish and not applicable in the facts and circumstances of the case. Refund allowed - appeal allowed - decided in favor of appellant. Issues:- Interpretation of Section 11B of the Central Excise Act in relation to refund claims paid under a mistake of law.- Applicability of time limits for refund claims under Section 83 of the Finance Act.- Consideration of case law precedence in similar matters.Interpretation of Section 11B of the Central Excise Act:The case involved a dispute regarding the refund claim filed by the appellant for service tax paid under the reversed charge mechanism for GTA services. The original Adjudicating Authority allowed the refund, stating that the duty was paid under a mistake of law, exempting it from the provisions of Section 11B of the Central Excise Act. However, the learned Commissioner (Appeal) reversed this decision, asserting that the refund should be governed by Section 11B. The Tribunal analyzed the facts and held that the duty was indeed paid under a mistake of law, citing relevant precedents such as the decision of the Hon'ble Supreme Court in the ITC case and the Tribunal's decision in Ambiance Hospitality case. Consequently, the Tribunal set aside the Commissioner's decision and allowed the appeal, emphasizing the exemption from Section 11B due to the mistake of law.Applicability of Time Limits under Section 83 of the Finance Act:The crucial issue addressed was whether the time limit prescribed under Section 11B, read with the provisions of Section 83 of the Finance Act, applied to the case at hand. The appellant contended that since the duty was paid under a mistake of law, the time limit should not be applicable. The Tribunal agreed with this argument, citing the decisions of the Hon'ble Supreme Court and the Tribunal in similar cases. Notably, the Tribunal distinguished the case of Doaba Cooperative Sugar Mills, where the Supreme Court upheld the provisions of Section 28 of the Customs Act regarding refund of duty, as not directly relevant to the present matter. Consequently, the Tribunal concluded that the time limit prescribed under Section 11B was not applicable in this scenario due to the mistake of law involved in the payment of duty.Consideration of Case Law Precedence:The Tribunal extensively considered relevant case law precedents, such as the decision of the Hon'ble Bombay High Court in the Parijat Construction case and the Tribunal's decision in the Ambiance Hospitality case. These precedents supported the appellant's argument that the time limit for refund claims should not apply when duty is paid under a mistake of law. The Tribunal found these precedents in favor of the appellant, leading to the setting aside of the Commissioner's decision and the allowance of the appeal. By analyzing and distinguishing various legal precedents, the Tribunal provided a comprehensive legal basis for its decision in favor of the appellant.This detailed analysis of the judgment highlights the key legal issues addressed, the arguments presented by both parties, the application of relevant legal provisions, and the consideration of case law precedents in arriving at the final decision by the Tribunal.