The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), New Delhi, has allowed appeals filed by the Department against a construction company’s Rs. 5.92 crore service tax refund as the claim was filed beyond the six-month limitation period prescribed under Section 102 of the Finance Act, 2016.
The bench of Dr. Rachna Gupta (Judicial Member) and P.V. Subba Rao (Technical Member) disagreed with the approach taken by the lower authorities. Citing a string of precedents, including MDP Infra (India) Pvt. Ltd. and Zaigham Enterprises, the Tribunal emphasized that the six-month limitation under Section 102(3) of the Finance Act, 1994, must be strictly adhered to.
The respondent/assessee, NSC Projects, a registered service provider under categories including “Works Contract Services” and “Construction of Government Buildings,” filed for a refund on February 10, 2017. The refund related to tax paid between April 1, 2015, and September 30, 2016, which was retrospectively exempted by Section 102 of the Finance Act, 2016, effective from May 14, 2016.
The initial refund application was rejected on limitation grounds. However, the Commissioner (Appeals) overruled this in 2017 and directed reconsideration of the merits. On January 28, 2019, the original authority allowed the refund, citing the retrospective nature of the exemption and ruling that the doctrine of unjust enrichment did not apply as the refund would be passed on to the government entity that bore the tax.
The Tribunal observed that the exemption notifications have to be read strictly. Delay in filing refund applications is not condonable, and the department has no jurisdiction to enlarge limitations provided under a statute or notification.
The bench also criticized the Commissioner (Appeals) for failing to follow judicial discipline and held that procedural delays cannot be overlooked without adequate justification.
Case Details
Case Title: Commissioner Versus M/s NSC Projects (Private) Limited
Case No.: Service Tax Appeal No. 50779 of 2018
Date: 25/06/2025
Counsel For Appellant: S.K. Meena, Authorized Representative
Counsel For Respondent: Hemant Bajaj, Advocate
