2026-VIL-1084-CESTAT-KOL-ST
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SERVICE TAX CESTAT Cases

Service Tax - Applicability of limitation period on refund of erroneously paid service tax under Reverse Charge – Movement of goods partly by road through a transport contractor and partly by rail - The service provider raised invoices charging service tax on the transport contractor, which were endorsed in favor of appellant – The Appellant, under the mistaken belief that Reverse Charge mechanism was applicable to rail transportation services, paid service tax on the same transportation services for which the service provider had already discharged service tax liability - Whether the appellant is entitled to claim refund of service tax paid by it on transportation of goods by the service provider when the service provider had already paid service tax on the same services and the appellant also paid service tax under RCM – HELD - The fundamental principle is that service tax cannot be levied twice on the same activity. If service tax has been discharged on the same transportation activity by both the service provider and the appellant under RCM by mistake, then the service tax paid by the appellant is required to be refunded. The matter requires examination by the adjudicating authority to ascertain whether service tax has indeed been paid twice on the same services - When service tax has been paid erroneously under the RCM on services that were not payable by the service recipient, the limitation period prescribed under Section 11B of the Central Excise Act, 1944 does not apply to refund claims - The period of limitation cannot be invoked when amounts have been paid under a mistake of law and the revenue had no jurisdiction to collect or retain. Such payments are in the nature of mere deposits and not duty or amount payable in law - The matter is sent back to the adjudicating authority to examine whether service tax has been paid twice on the same transportation services and to pass an appropriate order in accordance with law. The limitation period is held to be inapplicable to the refund claims in question - The appeals are disposed of by way of remand
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