Order date – 23 March 2023

Parties – M/s Erweka India Vs Commissioner of Central Excise & ST, Ahmedabad

Facts –

• The Appellate, M/s Erweka India, is an exporter of goods. They had a bonafied belief that their services are not taxable, therefore, written a letter dated 25.06.2007 that even though they believe that their services does not come under Service tax net, they decided to take the registration and started paying service tax. Further, the letter also mentions that till clarification on the issue, their payment of service tax may be considered under protest.
• Thereafter, whatever service tax they have paid, they filed refund claim before the sanctioning authority, but the claim was rejected on the ground of being time barred.

Issue –

• Whether the limitation period of one year as per Section 11B of Central Excise Act, 1944 be relevant when the assessee paid the duty under protest?

Order –

• The Tribunal observed that the proviso under Section 11B(1), mentions that the period of one year will not apply if the assessee paid duty under protest and hence mentioned that in the present case also, it is not in dispute that Service tax was paid under protest therefore, the limitation of one year is prima-facie not applicable.
• Further the Tribunal mentioned that it completely disagree with the contention of learned Commissioner (Appeals) with regard that the protest letter may be the after-thoughts of the appellate. It stated that this letter is of dated 25.06.2007 and it cannot be said that it is an after-thought.
• Additionally it mentioned that the Learned Commissioner (Appeals) should have considered this letter and passed a reasoned order on this issue which he fails to do so.
• Accordingly, the impugned orders are set-aside and the appeals are allowed by way of remand to the Adjudicating Authority.