Order Date – 18 January 2024

Parties: M/s. Punj Lloyd Limited Vs Commissioner of Central Tax/GST

• The Appellant, M/s. Punj Lloyd Limited, made an application for refund of the excess amount of service tax on 12.03.2018, in terms of the order of the High Court dated 12.12.2017.
• A show cause notice was issued on 28.04.2020 after a lapse of more than 2 years as to why the refund claim should not be rejected on the ground of limitation under Section 11B of the Central Excise Act, 1944. 
• On adjudication, the refund application was rejected on the ground of limitation referring to the provisions of Section 11B – Explanation (B)(f) with respect to the ‘relevant date’.

Issue –

• Whether the refund rejected on the ground of limitation under Section 11B is proper and valid?

Order –

• The Tribunal observed that in view of the liberty granted by the High Court to the appellant to make an application for refund raising all averments and assertions, the appellant filed the refund application. Therefore it is Clause(ec) which would apply in the facts of the present case, as the provisions whereof are couched in very wide words. Clause(ec) not only refers to any judgement or decree, but also to any order or direction as a consequence of which the duty becomes refundable.
• So the “relevant date” in this case would be the date of the order of the High Court, i.e.12.12.2017 and not from the date of payment of tax as claimed by the revenue under Clause(f). The application for refund was filed by the appellant on 12.03.2018, i.e., within three months from the date of the order of the High Court and the same being before the expiry of one year as per Section 11B(1) of the Act has to be treated being filed within the prescribed time limit. Thus it was held that the refund application is not barred by limitation as in the peculiar facts of the present case the “relevant date” would be the date of the High Court order i.e.,12.12.2017.
• The consistent view of the various High Courts of Delhi, Karnataka, Kerala, Madras, Mumbai and Jharkhand is that limitation prescribed under Section 11B does not apply to a refund claimed in respect of service tax paid under a mistake of law. Therefore in terms of the 2nd proviso to Section 11B, limitation of one year shall not apply and in that view, the refund application cannot be rejected on the ground of limitation, being beyond the period of one year.
• The Appeal allowed.

Service Tax Appeal No.51218 of 2022(DB)

• The appellant M/s. Punj Lloyd Limited, being pointed out by the team of DGCEI the appellant deposited the amount of service tax along with interest on services of laying the pipeline. The Tribunal vide Final Order dated 8.10.2015 set aside the Order-in- Original holding that the services classifiable under the category of “Works Contract” became taxable service only after 1.06.2007.
• They filed a refund application on 13.10.2016, however almost after three years, the department issued a show cause notice dated 27.04.2020 saying that the refund application is time barred under Section 11B of the Act. Hence the refund was rejected.

Issue –

• Whether the period of limitation has to be computed from the date of the order or from the date of receipt of the order?

Order –

• The Tribunal observed that the submission that the order was signed on 26.10.2015 is not correct as the said signature is on behalf of the Registry as a procedural matter and would not affect the limitation. Hence it was held that that the ‘date of such order’ would mean the date of the order itself and therefore, in the present case as the order was passed on 8.10.2015, the period of one year shall be computed from the said date.
• Since in terms of the decision of the Supreme Court in Larsen & Toubro – 2015 (39) STR 913 (SC), the Tribunal in its Order dated 08.10.2015 set aside the demand, as services under the category of ‘Works Contract’ became taxable only after 01.06.2007. Consequently, during the relevant period no service tax was chargeable under the ‘Works Contract’ services and the Department could not have collected any service tax on that account.
• Accordingly, the Appeal is allowed on that ground. Consequently, the refund application is allowed, and the Department is directed to pay the appellant the amount claimed along with proportionate interest.