M/S. P.A.P. Exports vs Cce, Trichy

(Arising out of Order-in-Appeal No. 221/2012 dated 25.09.2012, passed by the Commissioner of Central Excise (Appeals), Trichy).

For approval and signature

Honble Shri R. PERIASAMI, Technical Member

M/s. P.A.P. Exports : Appellant

Vs.

CCE, Trichy : Respondent

Appearance

Ms. D. Naveena, Adv., for the appellant

Ms. Indira Sisupal, AC (AR), for the respondent

CORAM

Honble Shri R. PERIASAMI, Technical Member

Date of Hearing/Decision: 18.03.2015

FINAL ORDER No. 40334 / 2015

The present appeal arises out of the order-in-appeal No. 221/2012 dated 25.09.2012, passed by the Commissioner (Appeals). The brief facts of the case are that the appellant filed the refund claim consequent to the Order-in-Original No. 28/2010-ST dated 22.12.2010, wherein the adjudicating authority confirmed the demand of payment of service tax on reverse charge mechanism for the period after 18.04.2006 and dropped the demand for the earlier period. The appellant claimed the consequential refund of service tax of Rs. 64,910/- paid under reverse charge mechanism which was dropped by the adjudicating authority. The appellant filed the refund claim on 05.12.2011 and the same was returned on 07.02.2011 with a query for rectifying the defect. The refund claim was again resubmitted on 01.03.2012. A show cause notice dated 01.05.2012 was issued for rejection of the refund claim as time barred. The adjudicating authority in his Order-in-Original No. 24/2012 dated 28.05.2013, rejected the refund claim as time bar. On appeal by the appellant, the Commissioner (Appeals) dismissed their appeal and upheld the order of the adjudicating authority. Hence, the present appeal.

2. The Ld. Advocate for the appellant submits that they have paid the service tax of Rs. 18,24,156/- on Business Auxiliary Service under reverse charge mechanism under protest on 14.08.2008. The show cause notice dated 05.10.2009 demanding service tax on reverse charge mechanism was adjudicated and the adjudicating authority in his order dropped the demand for the period prior to 18.04.2006, and confirmed the balance demand. She further submits that they have immediately filed the refund claim on 05.12.2011, within the stipulated time limit of one year. The refund claim was again re-submitted on 01.03.2012. Since they have paid the service tax amount under protest, the same was recorded in the Order-in-Original dated 22.12.2010 at para-39, the time limit is not applicable to their case as they have paid the service tax under protest pending adjudication. She submits that there was no levy of service tax under reverse charge mechanism prior to 18.04.2006 and the amount paid is not the service tax amount, no time limit applies for claiming the refund. Regarding photocopy of the GAR Challan for evidencing payment of service tax, she submits that they have submitted the original GAR challan before the adjudicating authority, where the service tax demand was confirmed and partly allowed in the Order-in-Original dated 22.12.2010. Therefore, they produced the photocopy of the challans for the refund claim.

3. On the other hand, the Ld. AR reiterated the findings of the adjudicating authority, commissioner (Appeals). She further submits that the claim was hit by time bar since it was filed beyond one year. She submit that the actual claim was submitted on 01.03.2012, which was clearly evident from the adjudication order. She relied upon the decision in the case of Hindustan petroleum Corporation Ltd. Vs. CCE, Mumbai  2015 (317) ELT 379 (Tri.-Mum.). Hence both the authorities below rightly rejected the refund claim of the appellant.

4. I have carefully considered the submissions of both the sides and perused the records. The short issue is whether the refund claim of the appellant is hit by time bar. The LD. Advocate submitted a copy of the Chronological events, which is reproduced as under:-

Date Events

05.10.2009 SCN issued for Rs. 22,93,272/- under BAS 16.8.2008 to 08.12.2008 Service tax of Rs. 18,24,156/- paid under protest 22.12.2010 Order-in-Original No. 28/2010-ST passed for confirming service tax of Rs. 17,59,246/-

05.12.2011 Appellant filed refund claim for excess paid service tax Rs. 64,910/- consequent to OIO No.28/2010-ST 07.12.2011 Claim returned for non-filing of original challans for the payments made 01.03.2012 The claim was resubmitted by te appellant with copies of challans 05.03.2012 SCN issued, proposing to reject refund claim 28.05.2012 Order-in-original passed for rejecting the refund claim as time barred & non-production of original challans 25.09.2012 Appeal filed by the appellant rejected vide Order-in-Appeal No. 221/2012.

As seen from the above, the refund arises on account of the adjudication order passed by the Jt. Commissioner of Central Excise vide O-in-O dated 22.12.2010. Para 39 of the said order is reproduced as under:-

The period of dispute I this case is from 09.07.2004 to 31.12.2008 part of which is prior to enactment of Section 66A ie., 18.04.2006. Hence in view of this, service tax liability cannot be fastened on the assessees for the period prior to 18.04.2006. Accordingly, I hold that no service tax is payable by thm for the period prior to 18.04.2006. The service tax payable for the period 18.04.2006 to 31.12.2008 works out to be Rs. 17,59,246/- and have paid an amount of Rs. 18,24,156/- as service tax under protest on 14.08.2008. The protest is hereby vacated and the same is appropriated.

It is seen from the above, the adjudicating authority has held that no service tax is payable for the period prior to 18.04.2006. It clearly evident from the above order that the appellants have paid the service tax amount of Rs. 18,24,156/- under protest on 14.08.2008. When the demand was dropped for the period prior to 18.04.2008, they are eligible for the consequential refund and they have rightly filed the refund claim on 05.12.2011, which is well within the time limit of one year from the date of order. Hence, the appellants are rightly entitled for the refund as the service tax was paid under protest and no time limit applies.

5. Even otherwise, the appellant had duly filed the refund claim within one year from the date of receipt of the adjudication Order. It is also seen from the impugned order that the appellate authority has taken a different stand which was not part of the show cause notice or part of the adjudication order. The adjudicating authority has rejected the refund as time barred by taking the date of payment of service tax as the relevant date and held that it is time barred and even the show cause notice also alleges the same. Whereas, the appellate authority has gone beyond the adjudication order and the show cause notice and taken relevant date as the date of re-submission of the refund claim and the appellate order is beyond the scope of adjudication order.

6. Considering the fact that it is established from the records that the appellants have paid the service tax under protest, the question of time bar does not arise. Accordingly, I hold that the appellants are eligible for refund arising out of the order-in-original dated 22.12.2010. The impugned order is set aside and appeal allowed.

(Order pronounced and dictated in the open Court)

(R. PERIASAMI) TECHNICAL MEMBER BB 1