In the case of JYOTSANA D. PATEL Vs. Commissioner of Central Excise, Nagpur 2014 (35) S.T.R 77 (Tri. Mumbai), the Honorable CESTAT of Mumbai held that provisions of Section 11B of Central Excise Act, 1944 i.e. bar of limitation are not applicable on the refund claim of amount wrongly paid as service tax or any other such amount which is not required to be paid under decree of law.
In the instant case, appellant acquired a Residential Unit from a builder who collected service tax from the assessee. Since, service tax is not leviable on the residential unit as held by Hon’ble High Court in case of K.V.R Constructions Vs. CCE-2010 –TIOL-68-HC-KAR-ST= 2010(17) S.T.R 6 (Kar.), appellant filed a refund claim of the amount paid by builder as service tax to the department. The adjudicating authority sanctioned the refund claim. However, on the appeal filed by revenue before the Commissioner (Appeal), refund claim rejected on the ground of limitation.
Thereafter, the Honorable CESTAT held that as the appellant was not required to pay service tax on acquisition of Residential Unit and the amount so collected is not an amount of service tax. Thereby, the provisions of Section 11B of Central Excise Act, 1944 are not applicable in the instant case. Hence, the appeal is allowed in the favour of assessee.
Similar view was apprehended by the High Court of Madras in case of Natraj and Venket Associates Vs Asstt. Comm. Of S.T., Chennai 2010(17) S.T.R 3 (Madras), wherein it was held that the bar of limitation prescribed under Section 11B (1) applies only to refund of any duty of excise and interest (or Service Tax). However, in the given case when the amount paid cannot be said to be duty of excise, the bar of limitation under section 11B (1) cannot be applied on it.
Atul Kumar Gupta
B Com (Hons) FCA, FCMA, MIMA, CIQA, PGDEMM
Central Council Member of ICAI (2013-16)
Former Chairman NIRC of Institute of Chartered Accountants of India
Former Chairman NIRC of Institute of Cost Accountants of India
Author of “An Introduction to Service Tax” & “Comprehensive Guide to Service Tax”
M: 9810103611 E: firstname.lastname@example.org