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of <h1>Builder wins appeal for refund claim time-barred ruling overturned</h1> <h3>M/s. NRK Homes Pvt. Limited Versus Commissioner of Central Goods and Service Tax, Excise and Customs</h3> M/s. NRK Homes Pvt. Limited Versus Commissioner of Central Goods and Service Tax, Excise and Customs - TMI Issues:Refund claim under Rule 6(3) of Service Tax Rules - Time bar for refund - Applicability of Section 142 of CGST Act - Interpretation of Karnataka High Court ruling.Analysis:The appellant, a builder registered under the category of 'construction of residential complex service,' deposited service tax on advances received from customers for a project that got delayed. Some customers demanded refunds, including the service tax amount, which the appellant refunded. The issue revolved around Rule 6(3) of the Service Tax Rules, allowing credit for excess service tax paid if the service was not provided. The appellant's refund claim was rejected as time-barred under an order-in-original dated 05.03.2018.The Commissioner (Appeals) remanded the matter, directing the adjudicating authority to verify if the appellant had actually refunded the service tax to customers as per Rule 6(3). The appellant contended that the unadjusted credit under Rule 6(3) was refundable without a time bar, citing Section 142 of the CGST Act and a Karnataka High Court ruling. The appellant submitted evidence of refund to customers and relied on legal precedents to support their claim.The Tribunal found the lower court erred in denying the refund. It noted that the appellant had rightfully taken credit under Rule 6(3) for services not provided, as evidenced by the refunds made to customers. Additionally, Section 142(5) of the CGST Act allowed for refunds of tax paid during the Service Tax regime for services not provided. The Tribunal also referenced the Karnataka High Court ruling to support the appellant's claim for refund.Consequently, the Tribunal allowed the appeal, setting aside the impugned order and holding the appellant entitled to a refund of the unadjusted credit in their cenvat credit register as of 30.06.2017. The adjudicating authority was directed to disburse the refund amount within two months from the date of the order, along with applicable interest as per rules.
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