Tribunal grants refund for service tax paid under protest, extends limitation period

The Tribunal ruled in favor of the appellants in a case concerning a refund claim for service tax paid, emphasizing the payment under protest and the extended limitation period. The Tribunal held that the limitation did not apply to the refund claims, directing the Adjudicating Authority to process the refund with interest within thirty days. The appeals were allowed, providing relief to the appellants.

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Issues:
- Whether the refund claim filed by the appellants regarding service tax paid is barred by limitation as per Section 11B(5) of the Central Excise Act.

Analysis:
The appellants, engaged in manufacturing and trading cotton and textile goods, were subject to service tax under the reverse charge mechanism for services received from abroad. A stay order by the Madras High Court exempted them from paying tax until a specific date. Despite subsequent demands from the Revenue and depositing the disputed service tax under protest, the appellants filed refund claims for the tax paid. The rejection of the refund claims was based on the argument that they should have followed specific notification procedures for filing refunds within a limited timeframe.

The appellants argued that the limitation period was extended to one year by Notification No. 18/2009-ST and contended that they paid the tax under protest, thus the limitation from the date of export should not apply. However, the Commissioner (Appeals) upheld the rejection of the refund claims, stating that the appellants failed to prove they deposited the tax under protest. The appellants appealed to the Tribunal, emphasizing their payment under protest and timely filing of the refund within the extended limitation period.

The Tribunal considered the correspondence following the High Court's stay order, which indicated the appellants' payment under protest. The Tribunal concluded that the limitation did not apply to the refund claims and directed the Adjudicating Authority to process the refund with interest within thirty days. The appeals were allowed, granting relief to the appellants.

In summary, the judgment addressed the issue of limitation regarding the refund claim for service tax paid by the appellants, emphasizing the payment under protest and the extended limitation period. The Tribunal ruled in favor of the appellants, directing the refund to be processed without the limitation constraint.

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