Service Receiver Can’t Bypass S. 11B Limitation: CESTAT

The Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has dismissed the appeal filed by Chaudhary Devi Lal University and upheld rejection of a refund claim of ₹45.71 lakh, ruling that refund claims relating to service tax paid, even if alleged to have been paid by mistake, remain subject to the statutory limitation period under Section 11B of the Central Excise Act. The bench of S. S. Garg, Member (Judicial) has observed that the University had filed the refund application in May 2017 for payments relating to April 2013–June 2014 and that the authorities below had rejected the claim primarily because of limitation. The dispute arose after the University sought a refund of ₹45,71,696 on 18 May 2017 for the period April 2013 to June 2014. The University contended that it had received manpower supply services from various service providers who charged service tax, which the University subsequently paid. It argued that being an educational institution, the services fell under Serial No. 9 of Mega Exemption Notification No. 25/2012-ST and therefore no service tax liability existed in the first place. The refund claim, however, was rejected by the original authority on multiple grounds. The Department observed that the University had failed to provide original invoices and had instead submitted photocopies that were incomplete or unclear. Questions were also raised regarding the nature of services rendered, proof of actual payment of service tax, agreements with service providers, proof regarding non-passing of tax incidence, and compliance with documentary requirements under the refund mechanism. The Department also took the position that the claim was filed beyond the statutory one-year limitation period prescribed under Section 11B. The Commissioner (Appeals) affirmed the rejection and further observed that the University was merely the recipient of services and not the service provider, making its eligibility to seek refund questionable. Before the Tribunal, the University argued that the service tax was never legally payable and that the amount had been collected due to ignorance or mistake. It submitted that where tax itself was not leviable, amounts paid could not be characterized as "duty" and therefore limitation provisions under Section 11B should not apply. It also argued that the Department had no authority to retain money collected without authority of law. The University relied upon judicial precedents including 3E Infotech, Mafatlal Industries, and Ishwar Metal Industries to support its contention that payments made mistakenly should be treated as deposits rather than tax and should therefore not be restricted by statutory limitation periods. The department opposed the plea and relied heavily on more recent judicial developments, particularly the CESTAT Chennai ruling in Mahindra Holidays and Resorts India Ltd., which had examined the same issue in detail. The Department argued that once amounts are paid under the service tax head and credited to the Government treasury, refund claims necessarily become governed by Section 11B and the prescribed limitation period. The Tribunal examined the rival contentions and framed the principal issue as whether the limitation provisions under Section 11B applied to such refund claims. The Tribunal relied upon the Supreme Court ruling in Porcelain Electrical Manufacturing Co., which held that refund applications made before departmental authorities must strictly adhere to statutory limitation requirements and that general limitation principles cannot override the legislative framework. It further relied on the detailed analysis in Mahindra Holidays and Resorts India Ltd., where it had been held that the remedy for refund is a statutory right and must be pursued in accordance with the conditions prescribed by law. The Tribunal concluded that the provisions of Section 11B were applicable and found no infirmity in the order rejecting the refund claim. The appeal was therefore dismissed. Case Details Case Title: M/s Chaudhary Devi Lal University Versus Commissioner of CE & CGST, Panchkula Citation: JURISHOUR-1358-CES-2026(CHAN) Case No.: Service Tax Appeal No. 61514 of 2018 Date: 22.05.2026 Counsel For Appellant: Pardeep Utreja, C.A. Counsel For Respondent: Amita Gupta, Authorized Representative Click Here To Read Order Read More: Customs Value Enhancement Can’t Become Final Merely Due to Importer’s Consent Letter: CESTAT

Service Receiver Can’t Bypass S. 11B Limitation: CESTAT

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