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PJ/Case Laws/2012-13/1143

Whether the claim for refund for double payment of Service tax can be rejected on the ground that the limitation period has been expired?
Case: NEPTUNE INDUSTRIES LTD. V/S COMMR. OF C. EX., AHMEDABAD
 
Citation: 2012(280) E.L.T. 528(Tri.-Ahmd.)
 
Issue:- Whether the claim for refund for double payment of Service tax can be rejected on the ground that the limitation period has been expired?
 
Brief Facts: - The appellant provided Erection and Commissioning service to M/s. Cera Sanitaryware Ltd. and raised invoice No. 17 dated 30-3-2008 for which they had paid service tax amounting to Rs. 16,068 vide RG23 Pt-II E. No. 659 dated 30-3-2008. And they also provided service to M/s. Decolight Ceramic Ltd, Morbi and raised invoice No. 18 dated 30-3-2008 for which they had paid service tax amounting to Rs. 3,02,944/- vide RG 23 Pt-II E. No. 660 dated 30-3-2008. Thus they had paid total service tax amounting to Rs. 3,19,012/- in RG.23 Pt-II. Further, the said appellant also paid service tax amounting to Rs. 3,02,944/- against bill No. 18 dated 30-3-2008 vide challan No. 12 dated 5-5-2008 and service tax amount of Rs. 16,068/- against bill No. 17 dated 30-3-2008 vide challan No. 0193 dated 3-10-2008, thus resulted into double payment of service tax amount of Rs. 3,19,012/-. Thereafter the appellant took the credit of Rs. 3,19,012/- in their Cenvat credit account vide RG 23 Part-II E.No. 1109 and 1110 dated 17-3-2009. On being advised by the Range Superin­tendent, they had reversed the credit of Rs. 3,10,012/- vide RG.23 Part-II E.No. 97 and 98 dated 22-5-2009. Thereafter the appellant filed refund claim on 24-5-2009 under Section 11B of Central Excise Act, 1944 read with Section 83 of the Finance Act for the double payment of service tax on 5-5-2008 and3-10-2008. The adjudi­cating authority sanctioned the refund of Rs. 16,068/- and rejected the refund of Rs. 3,02,944/- on the ground that they have filed refund claim towards double payment on 29-5-2009 which is after expiry of one year limitation time period prescribed under section ibid. Being aggrieved by the order of the original adjudicating authority, appellants filed appeal which has been rejected.
 
 
 
Appellant’s Contention: - The appellants contended that the refund claim has been rejectedon the ground that the claim was submitted beyond one year from the date of payment of service tax. They submit that the stand taken by the department is wrong since the credit taken by them in their cenvat credit account of the service tax paid on 30-3-2008 which was not due but was only a correction entry and since the original payment made on 30-3-2008 was not due, it becomes correction of a wrong debit entry. Therefore the credit entry made by them in March 2009 cannot be held to be legally wrong and the decision of the Larger Bench of the Tribunal in the case ofBDH Industries Ltd. v. C.C.E., Mumbaire­ported in 2008 (229) E.L.T. 364 (Tri.- LB) was not applicable. He submits that this view has been upheld by the Tribunal in the decisions in the case of S. Subrahmanyan & Co. v. C.C.E., Vadodara reported in 2011 (268) E.L.T. 497 (Tri.- Ahmd.), ESDEE Paints Ltd. v. C.C.E., Ahmedabad reported in 2010 (249) E.L.T. 225 (Tri.- Ahmd.).Further, he also relies upon the decision of the Tribunal in the case of Raj Petro Specialties P. Ltd. v. C.C.E., Vapi reported in 2011 (22) S.T.R. 372 (Tri. - Ahmd.) = 2009 (246) E.L.T. 489 (Tri.-Ahmd.), where also the reversal of credit entry was made at the instance of the Revenue and thereafter refund claim filed was rejected on the ground of limitation.
 
Respondent’s Contention: - The respondents argued that therefund claim filed by the appellant is for the service tax paid on 30-3-2008. The subsequent reversal of debit entry and reversal of credit entry are not relevant to the issue and therefore the date of payment ofduty has been rightly taken as 30-3-2008 and refund claim has been correctly rejected even though he has lot of sympathy for the appellants, legally there can be no help to the appellants.
 
 
Reasoning of Judgment: - The Hon’ble Tribunal held that as regards the first question as to whether appellants could have taken re-credit of the debit entry made by them on 30-3-2008, as submitted by the appellant the issue is covered by the decisions of the Tribunal cited by the appellant. In all these cases, the decision of the Larger Bench was cited and taken note of and distinguished. Therefore the submissions made by the appellant that they were entitled to suo motu credit and therefore there was nothing wrong in availment of the credit has to be sustained. Once this is sustained if the credit entry becomes a legal entry, the relevant date for the purpose of refund claim becomes the date on which reversal of its entry was made and refund claim was filed. Accordingly, the rejection of the refund claim on the ground of the limita­tion has to be set aside. Further, the case of the appellants is also supported by the decision of the Tribunal in the case of Raj Petro Specialities P. Ltd.In that case also, appellant had paid the tax on GTA service in cash and reversed the debit entries made in the cenvat credit account. However, the re-credit entries were reversed once again because of advice by the department and a refund claim was filed. They took the view that appellants cannot be penalized for action taken by them at the instance of Revenue Authorities which itself was not in ac­cordance with law. In this case also appellants took suo motu credit on 17-3-2009. On being advised by the Range Superintendent, the entries were reversed on 22- 5-2009. It has to be noted if the Range Superintendent were to advise the appel­lant to file a refund claim immediately after reversing the entry, the refund claims would not have been time barred at all. While advising reversal, the rem­edy available to the appellant by way of filing refund claim could have been in­timated in the case of immediately after coming to know that the re-credit was wrong, appellants could have filed a refund claim. However, this would be ex­tending the benefit on the basis of equity. There­fore in whatever manner the issue is looked into, what emerges is that the appel­lant is eligible for the refund. In view of the above position, the appeal is allowed and it is held that appellant is entitled to re-credit of the amount reversed by them in the cenvat credit account.
 
 
Decision: - The appeal was allowed.
 
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