service tax refund

[Mukund Thakkar]

Dear All expert,

My client unit audited by Central excise dept. during the course of audit , officer are advise and giving the memo for the payment of service tax under RCM (man power Supply) during the year 2012-13 and 2013-14.along with interest and penalty, in the month of 25.05. 2014. and same is continue by unit, and taking cenvat credit for the payments made by unit,

After period of one year again dept audt conduct on 01.06.2015 and issue the memo for wrong avialment of cenvat credit of RCM ( Man power Supply) saying that you are not Body corporate company but partnership firm. as per RCM notification 30/2012 dated 20.06.2012 sr.no 8 of the said notification you are not falling under the category of RCM and not liable to pay service tax. and eligible to take cenvat credit.. on bases of auidt memo duty reversed creidt.on dated 01.06.2015

on bases of two contradictory input from dept. my client had file the refund case and dept rejected on the ground of limitation of time filling the claim.

please giving your inputs/ guidance for file reply to dept.

AI Summary

Refund of wrongly paid service tax under reverse charge may not be time barred when payment made under departmental compulsion.
Where a taxpayer paid service tax under RCM following audit directions but a later audit found RCM inapplicable to the taxpayer's business form, payments made under departmental compulsion may be recoverable as amounts rather than tax and thus not subject to the usual one year refund limitation; claimants should produce the departmental directions prompting payment, invoke case law on compelled payments, and seek refund of reversed CENVAT credit, filing within one year from the date of reversal when required.