TaxTMI 
TaxTMI 
2017 (9) TMI 1324
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....ence the appellant filed these appeals. 3. The Ld. Counsel appearing on behalf of the appellant submitted that the collection of Service Tax is without the authority of law, as admitted by the lower authorities and therefore, the refund cannot be rejected as barred by limitation. He referred to the various decisions as under:- (a) M/s. Monnet International Ltd. Vs. Commr. of Central Excise, New Delhi (Tri-Del.)- Final Order No. 52170-52171/2017 Dated-8/3/2017 (b) M/s. Natraj & Venkat Associates Vs. ACST (2010) 26 STT 232 (c) Indian Oil Corporation Vs. CCE (2010) 256 ELT 232 (P&H) HCDB) (d) Union of India Vs. ITC Limited 1993 (67) E.L.T. 3 (S.C.) (e) Shravan Banarasilal Jejani & Others Vs. CCE,Nagpur in order No. A/308-310/14SMB/C-IV (f) Commr. of C.Ex. (Appeals), Bangalore Vs. KVR CONSTRUCTION-2012 (26) S.T.R. 195 (Kar.) (g) Jain Irrigation Systems Ltd. Vs. Commissioner of Central Excise, Nashik 2016 (42) S.T.R. 377 (Tri-Mumbai) (h) Jyotsana D. Patel Versus Commissioner of Central Excise, Nagpur- 2014 (35) S.T.R. 77 (Tri.-Mumbai) (i) GEOJIT BNP PARIBAS FINANCIAL SERVICES LTD. Versus C.C.E., CUS. & S.T., KOCHI -2015 (39) S.T.R. 706 (Ker.) (j)GULSHAN CHEMICALS LTD. Versus ....
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....d of such duty to the Assistant Collector of Central Excise before the expiry of six months from the relevant date : Provided that the limitation of six months shall not apply where any duty has been paid under protest. If on receipt of any such application, the Assistant (2) Collector of Central Excise is satisfied that the whole or any part of the duty of excise paid by the applicant should be refunded to him, he may make an order accordingly. Whereas a result of any order passed in appeal or revision (3) under this Act refund of any duty of excise becomes due to any person, the Assistant Collector of Central Excise may refund the amount to such person without his having to make any claim in that behalf. Save as otherwise provided by or under this Act, no claim (4) for refund of any duty of excise shall be entertained. Notwithstanding anything contained in any other law, the (5) provisions of this section shall also apply to a claim for refund of any amount collected as duty of excise made on the ground that the goods in respect of which such amount was collected were not excisable or were entitled to exemption from duty and no court shall have any jurisdiction in respect of....
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....of the goods and which is levied because of the mere fact of the goods having been produced or manufactured and unrelated to and not dependent on any commercial transaction in them. The Supreme court also pointed out that the primary and fundamental meaning of excise duty in English is that of a tax on articles produced or manufactured in the taxing country and intended for home consumption. 11. In D. Cawasji & Co. v. State of Mysore [1978 (2) E.L.T. (J154) (S.C.) = 1975 (1) SCC 636], a question arose as to whether the payment of cess made under a mistake of law, can be recovered beyond the period stipulated. Though the Supreme Court ultimately rejected the claim for refund on the ground of delay and laches, the Court made certain observations in paragraphs 7 and 8 of the judgment which read as follows :- 7. Section 17(1)(c) of the Limitation Act, 1963, provides that in the case of a suit for relief on the ground of mistake, the period of limitation does not begin to run until the plaintiff has discovered the mistake or could, with reasonable diligence, have discovered it. In a case where payment is made under a mistake of law as contrasted with a mistake of fact, generally the m....
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...., I am of the considered view that the claim of the petitioner for refund can be entertained by this Court, since there is no dispute about the fact that no service tax was payable by the petitioner and as a corollary, what was paid by them was not service tax. (iii) The Hon'ble Punjab & Haryana High Court in the case of Indian Oil Corpn. Ltd. (supra) observed that as the petitioner was not liable to pay the duty, therefore, the Tribunal could not reject the application for refund as barred by limitation. The relevant portion of the said decision is as under: 5. A perusal of the facts shows that the Indian Oil Corporation, Panipat Refinery were not liable to pay any duty on the goods cleared to bonded warehouses. Despite this, they paid the duty and subsequently on a letter written by the Assistant Commissioner, Central Excise filed an application claiming refund of the duty paid by them erroneously. The rejection of application by the Central Excise authorities on the ground that application has been filed beyond the period of 6 months from the date of crediting the amount in their personal ledger accounts cannot be sustained, because the State cannot enrich itself unjustly when....
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....ht for refund of the said amount. 14. While adjudicating the refund claim of petitioner, the adjudicating authority accepted the contention of petitioner and held the services rendered by petitioner were not exigible to service tax. As a matter of fact, the order of the Assistant Commissioner of Central Excise dated 19-11-2008 reads as follows : Thus it is evident that if the building or the civil structure are for the use of organizations or institutions being established solely for the educational religious, charitable, health, sanitation or philanthropic purposes and not for the purpose of profit are not taxable, being non-commercial in nature. Since this clarification issued by the Board vide Circular No. 30/10/2004 dated 17-9-2004 is very clear on the issue, the construction services undertaken by M/s. KVR Construction is not taxable in nature and the assessee is not liable to pay any service tax and he has paid it under the misunderstanding of law. Since the amount collected by the Government is not at all payable by the assessee, this amount would resemble the amount collected without any authority of law. Hence, the amount paid by them is not service tax but in the natur....
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....of Section 11B of the Act. It has been held therein that power under Article 226 has to be exercised to effectuate the regime of law and not for abrogating it, as the power under Article 226 is conceived to serve the ends of law and not to transgress them. At paragraph 113 of the said judgment, they classify the various refund claims into three groups or categories : (a) The levy is unconstitutional-outside the provisions of the (I) Act or not contemplated by the Act. (b) The levy is based on misconstruction or wrong or erroneous (II) Interpretation of the relevant provisions of the Act, Rules or Notifications: or by failure to follow the vital or fundamental provisions of the Act or by acting in violation of the fundamental principles of judicial procedure. (c) Mistake of law - the levy or imposition was (III) unconstitutional or illegal or not exigible in law (without jurisdiction) and, so found in a proceeding initiated not by the particular assessee, but in a proceeding initiated by some other assessee either by the High Court or the Supreme Court, and as soon as the assessee came to know of the judgment (within the period of limitation), he initiated action for refund of th....
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.... Thus, in the instant case also, the assessee-Appellants were not subjected to Service Tax. Therefore, mere payment made by the assessee-Appellants will neither validate the nature of payment nor the nature of transaction. In other words, mere payment of amount would not make it a Service Tax payable by them. Hence, the amount deposited by the assessee-Appellants by mistake/good faith cannot be termed as Tax . 12. During the course of arguments, the learned counsel for the assessee-Appellants relied upon the ratio laid down in the case Kalpataru Power Transmission Ltd. (supra) wherein the Service Tax collected without any authority was declared outside the purview of Section 11B of the Act. The Hon ble Delhi High Court in the case of Mera Baba Realty Associate (P) Ltd. (supra) has mentioned that in such cases, the limitation of one year prescribed under Section 11B(1) of the Central Excise Act, 1944 would not apply and hence is not applicable. 13. Further, it may be mentioned that the Tribunal in the case of Commissioner of Central Excise, Pune-III vs Shankar Ramchandra Auctioneers, 2010 (19) STR 222 (Tri-Mumbai), has observed that the amount collected without authority of law,....
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....em. 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 (supra), the Government will have no authority to retain the said amount and will have to be refunded. 16. It may also be mentioned that in the case of Hind Agro Industries Limited (supra), we find that the Hon'ble Delhi High Court has circumscribed the above view by prescribing the period of three years, after discovery of the mistake, for claiming such refund. 17. Thus, we are of the view that in the instant case, the amount deposited by the assessee-Appellants without any authority of law cannot be considered as Service Tax. As per Article 265 of the Constitution, no tax can be collected without any authority of law. At the relevant time, there was no authority of law to collect Service Tax on the activity carried out by the assessee-Appellants. Hence, Section 11B of the Central Excise Act, 1944 is not applic....
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.... preferred non-permissible. 9. Therefore, I hold that the order passed by the Commissioner in review is not sustainable in the eyes of the law. On merits also the ld. Commissioner (A) has ignored to consider the fact that the adjudicating authority has considered that amount of service tax paid by the appellant is shown as receivable from the Excise Department. If same would have been considered there was no question of reviewing by the ld. Commissioner. Therefore, with these observation said order is set aside and on the refund claim of Rs. 7,94,490/- is allowed. 10. In the appeal No. ST/00214/2009, I find that as per Notification No. 32/2004 the appellant was not required to pay Service Tax at all when there is no liability for the appellant to pay Service Tax. Therefore, the provision of Section 11B of the Act are not applicable to this case as held by this Tribunal in the case of Jubilant Enterprises Pvt. Ltd. (supra). Therefore, I hold that bar of limitation is not applicable to the facts of this case. Consequently, the order of rejection of refund claim on the ground of limitation is set aside. Consequently, it is held that appellant is entitled to refund claim of Rs. 8,26,....