Service tax refund cannot be denied on limitation; remand must be completed within a fixed period

Refund of service tax could not be denied on limitation because the impugned reasoning was inconsistent with an earlier Division Bench ruling. The remand direction was left intact, but the remand exercise had to be completed within three months for the limited purpose of determining whether the vendor-assessee had remitted the tax amount to the Government. The order therefore preserved the remand while removing limitation as a ground to the refund claim.

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Issues: Whether the refund of service tax could be denied on the ground of limitation, and whether the remand proceedings were to be completed within a fixed time.

Analysis: The reasoning in the impugned order rejecting the refund claim on limitation was held to be inconsistent with the law already declared by the Court in an earlier Division Bench decision. The remaining part of the order directing remand was left undisturbed, with a direction that the remand exercise be completed within a stipulated period for deciding whether the vendor-assessee had remitted the tax amount to the Government.

Conclusion: Refund could not be denied on the ground of limitation, and the remand proceedings were to be completed within three months for the limited purpose indicated.

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