TaxTMI 
TaxTMI 
2026 (4) TMI 1891
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....ichment in terms of Section 11B of Central Excise Act, 1944 [CEA]. 2. Factual matrix of the case is that the assessee is engaged in the business of providing general insurance services. The assessee had issued insurance policies to its clients and paid service tax on the premium amounts under the Finance Act, 1994 [The Act], however, subsequently they were cancelled during the GST regime on account of various reasons, such as cheque dishonour, cancellation or alteration of policy on clients request, reversal of premium due to risk reduction. As a result, the assessee refunded the proportionate premium amount along with service tax component to the clients as no service has been provided either wholly or partly and filed the refund claim of Rs 2,34,57,490/- on 22.03.2018 for the period of July 2017 and Rs. 1,65,38,861/- on 18.06.2018 for the period August 2017 to March 2018 in terms of Section 142(5) of Central Goods and Services Tax Act, 2017 [CGST]. Appeal Nos.50149, 50150 & 50151/2020 3. Show cause notice dated 19.06.2018 was issued on the ground that refund of service tax paid before 22.03.2017 amounting to Rs. 10,34,022/- was not admissible as the claim was filed beyon....
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....he assessee was eligible to take credit of the amount of service tax paid, however, after roll out of GST, such amount is liable to be refunded in terms of Section 142(5) of CGST Act, subject to the provisions of existing law. Examining the mode of payment of insurance premium and its remittance, the impugned order remanded the matter to the Adjudicating Authority for proper verification that the financer/agents had remitted the amount to the insured by crediting the same to their account. 9. On the issue of applicability of unjust enrichment, the Commissioner (Appeals) considered the provisions of Rule 6(3) of Service Tax Rules, 1994 [The Rules] and Section 142(5) of CGST Act, 2017 and observed as under:- "15. It is seen from the above provisions of Rule 6(3) of the Service Tax Rules, 1994 that where the service provider has not provided the services and has refunded the payment or part thereof, so received for the service to be provided to the person from whom it was received, then they may take the credit of such excess service tax paid by him. Similarly, after introduction of the CGST Act, 2017, the provisions of Section 142(5) provides that every claim filed by a p....
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....for the assessee has emphasized on the mode of transaction whereby the amount was received from the insured and remitted back in the event of cancellation of the policy. He submitted that the assessee receives the premium amount through financer and the said financer in turn receives the said premium amount from the insured. Therefore, when the insurance policy is cancelled due to some reason, the assessee remits the premium amount along with service tax, proportionate to cancellation of the policy to the financer only and the financer then remits the said amount to the insured by crediting the same to its account. The Commissioner (Appeals) in its order dated 27.09.2019 has also taken note of these facts and concluded that the respondent had received premium amount from the corporate agent/financer and hence, in case of cancellation of policies, the amount proportionate to the policy cancellation has been refunded by them to the financer/agent only. We do not find any reason to differ with the view taken by the Commissioner (Appeals) specially with reference to the provisions of law relied on. We, therefore, hold that the Department is not right in invoking the principle of unjust....
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....he documents that the amount has ultimately reached the insured, it is not necessary to go into the submissions made further. Consequently, we hold that refund claims filed by the appellant are not hit by bar of unjust enrichment. 13. The issue of applicability of limitation prescribed under Section 11B of CEA to the refund applications filed under Section 142(5) of CGST is no longer res- integra and has been decided in favour of the assessee by series of decisions. Without multiplying too many decisions on the issue, we may refer to the decision of the Division Bench of this Tribunal in the case of Wave Megacity Centre Private Limited versus Commissioner (Appeals-I) Central Tax Goods and Service Tax and Central Excise, New Delhi [Final order No.51242-53/2025 dated 27.08.2025 in S.T. Appeals No.54979-80/2025], wherein it was observed:- "10. The issue of refund in similar circumstances and the contentions raised by the learned Counsel have been considered in series of decisions by different learned Single Members, as referred above. The consistent view taken in all these decisions is that refund claim of service tax paid under the existing law (Central Excise Act, 1944) ....
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....f Article 265 of the Constitution of India which specifically provides that "No tax shall be levied or collected except by authority of law." Since Service Tax, in issue, received by the concerned authority is not backed by any authority of law, the department has no authority to retain the same Buyer booked the flat with the appellant and paid some consideration. The appellant as a law abiding citizen entered the same in their books of accounts and paid the applicable service tax on it after collecting it from the buyer. But when the buyer cancelled the said booking on which service tax has been paid and the appellant returned the booking amount along with service tax collected then where is the question of providing any service by the appellant to that customer. The cancellation of booking coupled with the fact of refunding the booking amount along with service tax paid would mean as if no booking was made and if that is so, then there was no service at all. If there is no service then question of paying any tax on it does not arise and the department can't keep it with them. No law authorises the department to keep it as tax. The net effect is that now the amount, which earl....