Time limit to file refund claim

By | August 17, 2015
(Last Updated On: August 17, 2015)

Q: Whether Time limit to file refund claim is applicable to refund of tax paid at insistence of department ?

Where tax has been paid at insistence of department without any adjudication/assessment order, refund of said tax would not be governed by time-limit of section 11B


C.K.P. Mandal


Commissioner of Service Tax, Mumbai-II

APPEAL NO. ST/670/2012-MUM

NOVEMBER  21, 2014

Facts of the case 

The appellant is a Charitable Trust. It has two halls which are given on hire for various functions. They also received donations from caterers and decorators for permitting them to use their halls. They were asked to pay Service Tax by the Superintendent on the donations received by them. As regards hire charges for the halls, they were paying Service Tax under the category of mandap keeper. After a few rounds of litigation up to the Hon’ble High Court, it was held that donations received by them from caterers are not leviable to Service Tax. Therefore, they filed two refunds claim out of which one was sanctioned and the other was rejected on the ground of time-bar.


It has been held in various judgments pursuant to the Apex Court judgment in the case of Mafatlal Industries Ltd. v. Union of India 1997 (89) ELT 247 (SC)  and as held in the judgment of CCE v. KVR Construction [2012] 36 STT 33 (Kar.) , that the time-bar under section 11B will apply only if the demand has been made or paid as duty under the law. In the present case no such demand was made under law by a demand or order. Rather the tax which was collected was not payable in law and appellants were persuaded to pay the amount. Therefore, the appellant is entitled to refund along with appropriate interest payable under law.

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