TaxTMI 
TaxTMI 
2026 (1) TMI 1399
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.... by the Customs, Excise and Service Tax Appellate Tribunal, Chennai in Service Tax Appeal Nos.42538/2018 and 42539 /2018 respectively. 2. The short facts necessary to dispose of these appeals are as follows:- The appellant is rendering software enable services in relation to prepublication and exporting such services out of India. Based on export of services, the appellant filed refund claims under Rule 5 of CCR 2004 and upon scrutiny of the claim, the ACCE Puducherry II Division rejected the claim of Rs. 4,27,776/- for the period from April to June 2014 and Rs. 6,33,962/- for the period from October to December 2014 vide order OIO No.201 of 2015 dated 02.02.2015 pertaining to service tax paid by the Director of the company in her ind....
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....ise Act. Challenging the said orders, the present appeals have been preferred. 3. While admitting these appeals, this Court formulated the following substantial questions of law: 3.1. Whether the authorities were right in denying refund claim of a tax amount that was paid due to a mistake of law. 3.2. Whether the authorities were right in denying refund claim of a tax amount that was paid due to a mistake of law by ignoring the various precedents set by the Hon'ble Supreme Court and High Courts. 3.3. Whether the authorities not following judicial precedents would amount to judicial indiscipline. 4. The learned counsel appearing for the appellant would submit that the order of the Tribunal is erroneous and th....
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....ntainable since the refund sanctioning authority had considered the aspect of limitation in detail. The appellant took re-credit of the said amount only after the CESTAT order and then filed the impugned claim under Section 11B of CEA 1944. Since Revenue had withheld the amount till the CESTAT final order, limitation would apply only from the date of receipt of such CESTAT final order in terms of Section 11B(5)(B) (ec). 4.1. Further the learned counsel appearing for the appellant would submit that when the tax paid under mistake of law, is bound to be refunded and cannot be barred by limitation. It is well settled law that when the payment of tax was purely by mistake of law, the refund of the same can in no circumstances be denied or di....
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....erty service. However, she had not paid the service tax in respect of such service rendered by her. On the other hand, the appellant had paid the service tax on the said service on her behalf. As per the Notification No.45/2012-ST dated 07.08.2012 and as per Sl. No.5A, in respect of the services provided or agreed to be provided by a Director of a company to the said company, the service receiver is liable to pay 100% tax and the Director is exempted to pay service tax. The said notification applies only to the services rendered by a Director under the Director's service and not a service rendered in his capacity as a provider of Renting of Immovable Property service. Therefore, once it is clear that the service tax was not paid by the serv....
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....service tax from the appellant never objected and accepted such service tax deposited by them and as such, the denial of refund to the assessee under Rule 5 of CCR, 2004 is not justified and the service was used by the appellant in relation to their business activity and satisfied the essential requirement of use for rendering output service. The Service tax was paid on renting of immovable property service received from the Director of the company in her individual capacity qualifies as an eligible input service tax credit and the same is eligible to be refunded under Section 11B in terms of Rule 5 of the CENVAT Credit Rules, 2004 reviving their original claim and also held that the instant claim cannot be treated as a fresh claim and the ....
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....s not eligible for refund. It is well settled law that when the tax paid under mistake of law is bound to be refunded and cannot be rejected. 10. The learned counsel appearing for the appellant has relied upon the judgement of Hon'ble Supreme Court in a case of Union of India v. ITC Ltd., reported in 1993 (67) E.L.T. 3 (SC), wherein the Hon'ble Supreme Court held that "Assessee's claim to refund would not be disallowed solely because it seemed barred by limitation. Since the Assessee in that case made the claim for refund shortly after learning about their entitlement for the same, it would not be just to hold that such claim is hit by latches". Further, this Court in a case of 3E Infotech v. Cestat Chennai reported in 2018 (18) G.S.T.L.....