Refund of Tax paid on Export of Services in 2010 to 2011

[Sushil Kumar]

Dear Sir,

Our company has paid service tax on export of services from own pocket with a view that it is taxable. Later on getting clarification our company stopped deposited the tax. in 2012 our company filed application to the department for refund of amount paid erroneously, based on notification no. 11/2005 ST. Now office has passed an order stating that it is time barred case and your application is for rebate not refund. We gave a view that we paid the amount erroneously can not be treated as tax rather it would be treated deposit and time limit of section 11B of Central Excise Act are not applicable. However, he did not accepted our view and passed the order with mentioning his view about why the amount would be treated as deposit but service tax. Office's view was that you filed your claim in under notification 11/2005 which is for rebate. We said there is no other way to file refund claim in our case. Please suggest us with relevant rulings.

[KASTURI SETHI]

Section 11 B of Central Excise Act is meant for refund and rebate both. Section 11 B has been made applicable to Service Tax. Application form for claiming refund is FORM R (ANNEXURE-67) prescribed under Section 11 B.(Earlier Rule 173-S) You should have filed application for refund claim under this Form/Annexure-67 instead of filing refund claim under Notification No.11/2005-ST meant for rebate claim on account of export of service. Mere filing application for refund claim under wrong Notification or wrong Form (Annexure) does not disentitle you of refund claim, if otherwise admissible. Since Order-in-Original has been passed by the jurisdictional A.C/D.C., you have no option but to file appeal with the Commissioner (Appeals) against the said order. There is a plethora of judgments on this issue. However, I am mentioning following two judgements which are squarely applicable to your case:-

1. 2015(39)STR/706/KER in the case of Geojit BNP Paribas Finance Services Ltd. Vs. CCE, KOCHI (High Court of Kerala)= 2015 (7) TMI 635 - KERALA HIGH COURT

2. 2012(26)STR/185/KAR in the case of Commissioner (Appeals), Banglore Vs.KVR Constructions (High Court of Karnataka at Banglore)= 2012 (7) TMI 22 - KARNATAKA HIGH COURT

After going through these judgements you will be convinced that Section 11 B is relevant for refund and rebate and also your claim is not hit by time limitation. In both the cases situation is crystal clear.

 

 

 

[Rajagopalan Ranganathan]

Dear Kasturi Sir,

I was not able to locate the second citation in ExCus Electronic Library. The reference given by you appears to be incorrect. Please check and inform me.

[KASTURI SETHI]

Sir,

Correct citation is 2012(26)STR/195/KAR = 2012 (7) TMI 22 - KARNATAKA HIGH COURT = Commissioner of Central Excise (Appeals), Bangalore Versus KVR Construction. 185 was typed instead of 195. Typographical mistake.

[KASTURI SETHI]

Sh.Sushil Kumar Ji,

When we say Section 11 B is applicable for sanction of refund claim on account of Service Tax paid in excess by mistake (treating it as 'an amount' deposited with Central Govt. without authority of law) and on the other hand, we say such refund claim is not hit by time limitation prescribed under Section 11 B, the situation becomes paradoxical. Here two case laws of High Courts referred to in my reply dated 11.10.2015 comes to assessee's rescue.

AI Summary

Refund of erroneously paid service tax: remedy available under Section 11B despite wrong form filing; appeal advised. Statutory refund procedure under Section 11B governs repayment of service tax erroneously paid and covers both refunds and rebates; filing under an incorrect notification or form does not automatically disqualify an otherwise admissible claim, and denial on procedural or time-bar grounds should be challenged by appeal to the Commissioner (Appeals) relying on High Court precedents.