TaxTMI 
TaxTMI 
2017 (5) TMI 143
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....Dhoedaam Tea Estate,M/s.Deamoolie Tea Estate,M/s.Tippuk Ali Tea Estate,M/s.Rajah Tea Estate,M/s.Koilamari Tea Estate,M/s.Tengapani Tea Estate,M/s.Namdang Tea Estate,M/s.Dirial Tea Estate,M/s.Beesakopie Tea Estate,M/s.Lepekatta Tea Estate,M/s.Dihing Tea Estate,M/s.Arun Tea Estate of M/s.Gillanders Arbuthnot & Co. Ltd.,M/s.Mokalbari Tea Estate ,M/s.Goneshbari Tea Estate of Goneshbari Tea Co.Pvt.Ltd.,M/s.Dooria Tea Estate Versus Commissioner of Central Excise & Service Tax ORDER Per Shri P. K. Choudhary The issue involved in these appeals is as to whether the refund claims filed by the appellants of the Higher Education Cess and the Secondary & Higher Secondary Cess paid on tea cess for the period 2004 to 2014 are time barred and hit by the principle of unjust enrichment in terms of Section 11B of the Central Excise Act, 1944. The refund claims were filed on the ground that the Central Board of Excise & Customs by Circular NO.978/2/2014-CX dated 07.01.2014 had clarified that the Education Cess and the Secondary & Higher Education Cess are not to be calculated on cesses which are levied under the acts administered by department/Ministries other than Ministry of Finance, Department o....
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....(Pt.), dated 10th August, 2004 [2004 (171) E.L.T. (T3)], in which it was clarified that the Education Cess chargeable under Section 93(1) of the Finance (No. 2) Act, 2004 is to be calculated by taking into account only such duties which are both levied and collected by the Department of Revenue. 2. Representations have been received from trade and field formations seeking clarification as to whether the Education Cess chargeable under Section 93(1) of the Finance (No. 2) Act, 2004 and the Secondary and Higher Education Cess chargeable under Section 138(1) of the Finance Act, 2007 should be calculated taking into account the cesses which are collected by the Department of Revenue but levied under an Act which is administered by different departments such as Sugar Cess levied under Sugar Cess Act, 1982, Tea Cess levied under Tea Act, 1953 etc. 3. The matter has been examined. A cess levied under an Act which is not administered by Ministry of Finance (Department of Revenue) but only collected by Department of Revenue under the provisions of that Act cannot be treated as a duty which is both levied and collected by the Department of Revenue. 4. It is, therefore, reiterated that ....
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....ducation Cess has been levied under Section 138 of the Finance Act, 2007. It would, therefore, be germane to refer to the said provisions, which read as under : "93. Education Cess on excisable goods. The Education Cess levied under Section 91, in the case of goods specified - (1) in the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), being goods manufactured or produced, shall be a duty of excise (in this section referred to as the Education Cess on excisable goods), at the rate of two per cent., calculated on the aggregate of all duties of excise (including special duty of excise or any other duty of excise but [excluding Education Cess, and Secondary and Higher Education Cess levied under Section 136 of the Finance Act, 2007] on excisable goods) which are levied and collected by the Central Government in the Ministry of Finance (Department of Revenue), under the provisions of the Central Excise Act, 1944 (1 of 1944) or under any other law for the time being in force. (2) The Education Cess on excisable goods shall be in addition to any other duties of excise chargeable on such goods, under the Central Excise Act, 1944 (1 of 1944) or any other law for the t....
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....t., calculated on the aggregate of all duties of excise (including special duty of excise or any other duty of excise but excluding Education Cess, and Secondary and Higher Secondary Education Cess levied under Section 136 of the Finance Act, 2007 on excisable goods) which are levied and collected by the Central Government in the Ministry of Finance (Department of Revenue), under the provisions of the Central Excise Act, 1944 or under any other law for the time being in force. Thus, Education Cess is levied on the aggregate of all duties of excise (except to the extent indicated hereinabove) which are levied and collected by the Central Government in the Ministry of Finance (Department of Revenue) under the provisions of the CE Act or any other law for the time being in force. The provisions of Section 138 of the Finance Act, 2007 are identically worded except that the rate of Secondary and Higher Secondary Education Cess is one per cent. Thus, Education Cess and Secondary and Higher Secondary Education Cess being a cess levied at a percentage of the aggregate of all duties of excise, the basic requirement for levy thereof is the existence of excise duty. In the present case, as no....
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....as paid by the petitioner was not a duty of excise calculated on the aggregate of all the duties of excise as envisaged in the said provisions. Thus, the amount paid by the petitioner would not take the character of Education Cess and Secondary and Higher Secondary Education Cess but is simply an amount paid under a mistake of law. The provisions of Section 11B of the Central Excise Act, 1944 would, therefore, not be applicable to an application seeking refund thereof. As held by the Supreme Court in U.P. Pollution Control Board v. Kanoria Industrial Ltd., (supra), a refund is claimed on the ground that the provisions of the Act under which it was levied is or has been held to be unconstitutional, such a claim, being a claim outside the purview of the enactment, can be made either by way of suit or by way of writ petition. In the present case, though the provision under which the amount was paid was not declared unconstitutional, it has been declared that the same applies only in cases where the duty is both, administered and collected, by the Department of Revenue, whereas in the present case, the Oil Cess, though collected by the Department of Revenue is administered by the Minis....
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....e applicant comes to know of such mistake or with reasonable diligence could have discovered such mistake. Adverting to the case at hand, the mistake is in the nature of a mistake of law. It appears that the legal position was not clear and hence, pursuant to representations made by the trade and field formations, the C.B.E. & C. was required to issue the circular dated 7-1-2014 clarifying the issue. As noticed earlier, the petitioner had all along, right from July, 2004 been paying Education Cess and subsequently, from the year 2007 was paying Secondary and Higher Secondary Education Cess, till April, 2014. It was only when the Circular dated 7-1-2014 came to be issued by the C.B.E. & C., clarifying the issue, that the petitioner came to know about its mistake. Considering the nature of the mistake and the fact that the issue was not free from doubt till the above circular came to be issued by the C.B.E. & C., it also cannot be said that the petitioner could with reasonable diligence have discovered the mistake. It appears that it is only sometime after the Education Cess and Secondary and Higher Secondary Education Cess came to be paid for the month of April, 2014 that the petiti....
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....effect that M/s. Indian Oil Corporation Limited (the buyer of crude oil from Dholka and Wavel Fields) do hereby confirm that they have not paid the amount of Primary Education Cess and Secondary & Higher Education Cess on OID Cess to JTI on purchase of crude oil from them". Further, it is mentioned in the said certificate that this certificate has been issued on the request of JTI for onward submission to the concerned Central Excise Authorities, in support of refund claim of Primary Education Cess and Secondary & Higher Education Cess on OID Cess. This certificate should not be used other than the intended purpose, without obtaining written permission from them . This certificate has been issued by the customer (M/s. IOCL), on the request of the claimant and it has been mentioned that it should not be used anywhere else, without their prior written permission. Hence, this certificate is merely statement without being backed by any supporting documents on the basis of which the veracity of the content could be verified. Hence, this certificate is not having any evidential value. On verification of contents of the said certificates, it is also observed that these are mere statem....
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....bove discussion, this court is of the view that the contention that the petition is not maintainable in view of there being an alternative statutory remedy of appeal available to the petitioner, does not merit acceptance. * * * * * * * * * * * * * * 20.For the foregoing reasons, the petition partly succeeds and is, accordingly, allowed to the following extent : The order-in-original dated 24th November, 2014 is hereby quashed and set aside. The second respondent is directed to forthwith sanction and grant the petitioner refund of Rs. 73,60,061/- as claimed vide application dated 17-7-2014. Rule is made absolute, accordingly, to the aforesaid extent, with no order as to costs." 7. On close reading of the decision of the Hon'ble Gujarat High Court in Joshi Technologies International v. UOI (supra), I find that the facts of the present case are similar to the said case. I find that similar provisions as referred in the above case and the Board s circular are also discussed by the lower authorities in the present appeals. As the Hon'ble High Court has already discussed at length there is no need to mention the above provisions separately. 8. The ld.A.R. on behalf of the Revenue....
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....ssue as contrary to the Hon'ble Supreme Court. In the judicial discipline, the Hon'ble Supreme Court has authority to pass remarks on the decision of the High Court. I find that the ld.A.R. had not disputed that the facts of the present case are similar to the case of Joshi Technologies International v. UOI (supra). In any event, the Hon'ble Karnataka High Court in the case of CCE(Appeals), Bangalore v. KVR Construction [2012 (26) STR 195 (Kar.)] on an identical situation, dismissed the Revenue s appeal. It has been held that Service Tax paid mistakenly on construction services refund could not be rejected on the ground of limitation under section 11B of the Act, 1944. The Hon'ble High Court while passing the order had considered the decision of the Hon'ble Supreme Court in the case of Mafatlal Industries Ltd. (supra). The relevant portion of the said decision are reproduced below:- "15. We are not concerned with the other conditions of Section 11B of the Act because it is not the case of the appellant Department that the burden of service tax was passed on to any other person. As a matter of fact, the controversy in this appeal revolves around the maintainability of the very app....
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.... several judgments and provisions of Section 11A & 11B of Central Excise Act, at paragraph 137 of the said judgment, their Lordships have concluded as under : "137. Applying the law laid down in the decisions aforesaid, it is not possible to conclude that any and every claim for refund of illegal/unauthorized levy of tax can be made only in accordance with the provisions of the Act (Rule 11, Section 11B etc. as the case may be), and an action by way of suit or writ petition under Article 226 will not be maintainable under any circumstances. An action by way of suit or a petition under Article 226 of the constitution is maintainable to assail the levy or order which is illegal, void or unauthorized or without jurisdiction and/or claim refund, in cases covered by propositions No. (1), (3), (4) and (5) in Dulalbhai s case, as explained hereinabove, as one passed outside the Act and ultra vires. Such action will be governed by the general law and the procedure and period of limitation provided by the specific statute will have no application (Collector of Central Excise, Chandigarh) M/s. Doaba Co-operative Sugar Mills Ltd., Jalandhar [1988 (37) E.L.T. 487 (S.C.) = 1988 Supp. SCC 683....
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....m filed by the appellant is not time-barred. The case law relied upon by the ld. AR in Mafatlal Inds. (supra) is not relevant to the facts of this case. 7. In these circumstances, I hold that the appellant are entitled for refund claim as filed in time and the provisions of Section 11B of the Central Excise Act, 1944 are not applicable to the facts of this case. Accordingly, impugned order is set aside. Appeal is allowed with consequential relief. The Adjudicating Authority is directed to implement the order within 30 days of the communication of the same." 11. In the case of CCE, Pune-III v. Shankar Ramchandra Auctioneers[2010 (19) STR 222 (Tri.-Mumbai), held as :- "8. Now, I come to the second issue. The learned DR submitted that refund claim is barred by limitation as it has been filed beyond the period of limitation and to support this contention, he placed reliance on Jumax Foam Pvt. Ltd. (supra) and Karnik Maritime Pvt. Ltd. (supra). In this case, they paid tax voluntarily, no protest was lodged and they have recovered the service tax also from their clients. In the case of Beharay & Rathi Constructions (supra), the respondents were the recipient of the Goods Transport A....
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.... being time barred as per section 11B of the Central Excise Act, 1944. The Tribunal allowed the appeals filed by the assessee. It has been held as under:- "14. After considering the various case laws on the subject which are discussed in the above paragraphs, we come to the conclusion that Section 11B generally governs the claim for refund of duty and interest paid on such duty. The Section has been made applicable for service tax also. In the case of KVR Constructions (supra), the Hon'ble Kerala High Court has laid down yardsticks to decide those cases where Section 11B may not be applicable in service tax cases. The Hon'ble High Court has held that, if there is no authority to collect service tax by the department, it would not give them the authority to retain the amount paid which was initially not payable by them. 15. In the present case, the assessee-Appellants were rendering liaisoning service . The said services were not liable to Service Tax at the relevant time. Hence, the Department would not be in a position to collect service tax on the said activities since the same is not leviable. Consequently, in terms of the law laid down by the Hon'ble Kerala High Court (sup....