Excess service tax deposit kept for future adjustment is not hit by section 11B limitation and remains refundable.

An excess service tax deposit kept by the Department for possible adjustment against anticipated future liability, and left unutilised when the service tax regime ended, was treated as money not yet crystallised into a completed tax liability. On that basis, section 11B of the Central Excise Act, 1944 and its limitation framework were held inapplicable, and the date of payment could not be used as the relevant date for limitation. The distinction between a mistaken excess tax payment and an unadjusted balance was treated as material, and unjust enrichment by the Department was rejected. The refund claim was therefore not barred by limitation and was held refundable.

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Issues: Whether the refund of excess service tax payment was barred by limitation under section 11B of the Central Excise Act, 1944, and what was the relevant date for computing limitation.

Analysis: The amount in dispute had been paid in excess against the appellant's anticipated service tax liability for the quarter and remained unutilised when the service tax regime ceased on 01.07.2017. On these admitted facts, the amount was not a completed tax liability but money lying with the Department for possible adjustment under the then existing adjustment facility. In such a situation, section 11B and its limitation framework were held inapplicable, and the date of payment could not be treated as the relevant date for limitation. The distinction between a mistaken excess tax deposit and an unadjusted balance kept for future liability was treated as material, and unjust enrichment of the Department was rejected.

Conclusion: The refund claim was not hit by limitation under section 11B, and the excess amount was held refundable to the appellant.

Ratio Decidendi: Where an amount is deposited as an excess balance intended for adjustment against future tax liability and remains unutilised, it is not to be treated as duty or tax for the purpose of limitation under section 11B of the Central Excise Act, 1944.

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