Refund of service tax paid under mistake of law was treated as outside the one-year limitation, with double-payment verification remanded.

Refund of service tax allegedly paid twice on railway freight was said to depend on verification of whether both the service provider and the claimant discharged tax on the same service; where double payment was established, the claimant's payment could not be retained and the matter required fresh adjudication on facts. The note also states that a refund of tax paid under mistake of law was not barred by the one-year limitation under Section 11B of the Central Excise Act, 1944, so the limitation objection failed. The refund claim was therefore treated as not time-barred, while entitlement on merits was remanded for factual verification.

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Issues: (i) Whether the appellant was entitled to refund of service tax allegedly paid twice on transportation of goods by rail, once by the service provider and again by the appellant under reverse charge mechanism. (ii) Whether the refund claims were barred by limitation under Section 11B of the Central Excise Act, 1944.

Issue (i): Whether the appellant was entitled to refund of service tax allegedly paid twice on transportation of goods by rail, once by the service provider and again by the appellant under reverse charge mechanism.

Analysis: The entitlement to refund depended on a factual verification of whether service tax had in fact been discharged by both the service provider and the appellant on the same taxable service. If the appellant had paid service tax under reverse charge by mistake on a service already taxed at the hands of the provider, the amount paid by the appellant could not be retained and would be refundable. Since the record required examination to ascertain the actual tax payment position, the matter could not be finally decided on merits at that stage.

Conclusion: The issue was remanded to the adjudicating authority for verification of the payments and fresh decision in accordance with law.

Issue (ii): Whether the refund claims were barred by limitation under Section 11B of the Central Excise Act, 1944.

Analysis: Refund of an amount paid under mistake of law, where the tax was not lawfully payable by the claimant, could not be rejected merely on the ground of the one-year limitation under Section 11B. The limitation period was held inapplicable to the refund claims in the facts of the case.

Conclusion: The refund claims were held not to be barred by limitation.

Final Conclusion: The limitation objection was rejected, while the question of double payment and refund entitlement was sent back for fresh adjudication after factual verification.

Ratio Decidendi: Limitation under Section 11B does not apply to a refund claim for service tax paid under mistake of law, and refund entitlement for alleged double payment must be determined on verification of the actual tax discharge by the service provider and the claimant.

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