Refund limitation under transition law applies to pre-GST service tax claims on cancelled services; deposit theory rejected.

A refund claim for pre-GST service tax paid on cancelled or unprovided services under Section 142(5) of the CGST Act remained subject to the limitation period under Section 11B(1) of the Central Excise Act, because the transition provision did not expressly override that time bar and its non obstante clause operated only to the extent of the inconsistency expressly addressed. The amounts paid were treated as tax paid under a valid self-assessment regime, not as a deposit, so the claim continued to fall within the statutory refund framework. Minor differences in reasoning across refund orders did not create a vitiating inconsistency. The refund rejection was sustained.

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Issues: (i) Whether a refund claim for service tax paid on services later cancelled or not provided, filed under Section 142(5) of the Central Goods and Services Tax Act, 2017, is exempt from the limitation period under Section 11B(1) of the Central Excise Act, 1944. (ii) Whether the amount paid on such cancelled services can be treated as a deposit, and whether inconsistent treatment in different refund orders vitiates the rejection.

Issue (i): Whether a refund claim for service tax paid on services later cancelled or not provided, filed under Section 142(5) of the Central Goods and Services Tax Act, 2017, is exempt from the limitation period under Section 11B(1) of the Central Excise Act, 1944.

Analysis: Section 142(5) requires such claims to be disposed of in accordance with the existing law and directs cash payment only of the amount eventually found refundable, with the only express exception being the unjust enrichment condition in Section 11B(2). The non obstante clause embedded in the provision was read as operating in a restricted manner and only to the extent of the inconsistency it addresses. Since the transition provision does not expressly override the time limit, and no conflict was shown between Section 142(5) and the limitation rule under Section 11B(1), the refund claims remained subject to the prescribed period. The claim was also filed long after the relevant payments and after the credit notes, reinforcing the bar of limitation.

Conclusion: The refund claims were held to be barred by limitation and the contention that Section 142(5) removes the time limit was rejected.

Issue (ii): Whether the amount paid on such cancelled services can be treated as a deposit, and whether inconsistent treatment in different refund orders vitiates the rejection.

Analysis: The amount was paid as service tax under a valid self-assessment regime and not as a payment without authority of law. A subsequent cancellation of services does not convert the tax already paid into a deposit. The refund, if any, therefore remained governed by the statutory refund framework and not by a general restitutionary claim. As to alleged inconsistency, minor differences in reasoning across orders did not amount to diametrically opposite treatment on the core issue of limitation, and no enforceable inconsistency was established.

Conclusion: The deposit theory and the inconsistency challenge were rejected.

Final Conclusion: The appeals failed on the core issue of maintainability of the refund claims within limitation, and the rejection of refund was sustained.

Ratio Decidendi: A refund claim for pre-GST service tax under Section 142(5) of the Central Goods and Services Tax Act, 2017 must be processed under the existing law, and the transition provision does not impliedly displace the limitation under Section 11B(1) of the Central Excise Act, 1944; the non obstante clause operates only to the extent of the statutory inconsistency expressly addressed by the provision.

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