Latest Service Tax Case Laws & Rulings

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Facts –

The Appellant, M/s Welldone Infrastructure Pvt. Ltd., filed the refund application on 25.09.2018 for claiming the refund of service tax paid on the transaction of sale/provisional allotment entered into with the allottee which was subsequently cancelled by debiting its Cenvat credit ledger on 30.07.2015 in respect of the amount collected.
The learned Adjudicating Authority rejected the refund claim mentioning that the date of payment as shown in the ledger account is 30.07.2015 and the submission of the party that cause of action for claiming refund is 31.01.2018, as the relevant date is the date of payment of duty in terms of explanation to Section 11B of the Central Excise Act, 1944. Hence refund claim filed on 25.09.2018 is barred by limitation.

Issue –

Order –

The Tribunal observed that the aspect of limitation in the facts and circumstances of the present matters, has already been decided by this Tribunal in Wave One Private Limited v. Commissioner [2023 (11) TMI 1078 - CESTAT New Delhi], whereby it was held that the time limit prescribed under Section 11B of the Central Excise Act, 1944 cannot be invoked to reject a refund claim filed under Section 142(5) of the CGST Act, 2017.
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.
Once the buyer cancelled the booking and the consideration for service was returned, the service contract got terminated and once it is established the no service is provided, then refund of tax for such service become admissible.
Hence it was held that that the Appellant is entitled for refund and the appeal is accordingly allowed.

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