TaxTMI 
TaxTMI 
2016 (9) TMI 1405
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....#39;Assessee') is engaged in business of developing and selling various online/off line educational software packages. It is also providing holiday accommodation booking packages. It is registered with Service Tax Department since 2001. 3. On 12.1.2007 an Anti-Evasion Branch of Central Excise Department, Noida headed by Deputy Commissioner (A.E.) conducted search in petitioner's premises and got deposited Service Tax of Rs. 25,55,000/-. Petitioner was also forced to pay interest of Rs. 2,59,000/- on 29.3.2007. 4. Thereafter a show-cause notice dated 3.7.2007 was issued by Additional Commissioner Central Excise, Noida (hereinafter referred to as 'ACCE') demanding 'Service Tax' on handling charges. Assessment was finalized by ACCE vide order dated 31.12.2007 confirming payability of 'Service Tax' of Rs. 25,55,000/- and interest of Rs. 2,59,000/- under Section 75. It further imposed penalty under Section 76, 77 and 78 of Finance Act, 1994. 5. Petitioner on 2.2.2008 deposited an amount equivalent to 25% of penalty, imposed under Section 78 of Finance Act, 1994. 6. Against order dated 31.12.2007, petitioner preferred Appeal No. 99/CE/APP1/NOID....
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.... not under protest. It is also said that interest was also deposited by petitioner on his own since it was his legal obligation. Against Commissioner's order dated 29.8.2012, department reviewed matter and filed appeal before Tribunal which is pending. Since petitioner never filed any application for refund in accordance with Section 11B (3) of Act, 1944, hence respondents cannot entertain any claim of refund, and, no refund claim of petitioner, in law, is pending with respondents. No refund is due, automatically. Moreover, order of Commissioner (Appeals), dated 29.8.2012, is not final since appeal is pending before Tribunal. Board's Circular dated 8.12.2014 deals with amount deposited under Section 35F while in the present case it is Section 11B which will be applicable. Since petitioner never filed application as prescribed under Section 11B, hence no mandamus for refund is permissible. 12. The issue is simple though sought to be made complex, and it is, "Whether petitioner is entitled for refund, and if yes, whether also entitled for interest thereon." 13. The undisputed facts are that show-cause notice dated 3.7.2007 was issued to petitioner to show-cause why "Ser....
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....1B Central Excise Act, 1944 has no application in the case in hand. Section 11B Central Excise Act, 1944 reads as under: "Section 11B Claim for refund of duty.-- (1) Any person claiming refund of any duty of excise may make an application for refund of such duty to the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise before the expiry of one year from the relevant date in such form and manner as may be prescribed and the application shall be accompanied by such documentary or other evidence including the documents referred to in Section 12A as the applicant may furnish to establish that the amount of duty of excise in relation to which such refund is claimed was collected from or paid by him and the incidence of such duty had not been passed on by him to any other person: Provided that where an application for refund has been made before the commencement of the Central Excises and Customs Laws (Amendment) Act, 1991 (40 of 1991), such application shall be deemed to have been made under this sub-section as amended by the Act and the same shall be dealt with in accordance with the provisions of sub-section (2) as substituted by that Act:....
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.... clause (f) of the first proviso to subsection (2) shall be laid before each House of Parliament, if it is sitting, as soon as may be after the issue of the notification, and, if it is not sitting, within seven days of its re-assembly, and the Central Government shall seek the approval of Parliament to the notification by a resolution moved within a period of fifteen days beginning with the day on which the notification is so laid before the House of the People and if Parliament makes any modification in the notification or directs that the notification should cease to have effect, the notification shall thereafter have effect only in such modified form or be of no effect, as the case may be, but without prejudice to the validity of anything previously done thereunder. (5) For the removal of doubts, it is hereby declared that any notification issued under clause (f) of the first proviso to sub-section (2), including any such notification approved or modified under sub-section (4), may be rescinded by the Central Government at any time by notification in the Official Gazette." 17. It is urged that amount got deposited from petitioner under coercion, pursuant to search co....
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....under protest at the time of investigation, as has been recorded in original proceedings itself. Court has said as under: "There are also very many judgments of various Courts, which have also reiterated the same principles that in case any amount is deposited during the pendency of adjudication proceedings or investigation, the said amount would be in the nature of deposit under protest and, therefore, the principles of unjust enrichment would not apply. In view of the catena of decisions, available on this issue, this Court answers the first substantial question of law against the Revenue and in favour of the assessee." 22. It has been consistent view various Courts that any amount, deposited during pendency of adjudication proceedings or investigation is in the nature of deposit made under protest or pre-deposit and, therefore, principles of unjust enrichment would not be attracted. 23. Madras High Court in Commissioner of Central Excise v. Pricol Ltd. (supra) relied on a Bombay High Court judgment in Suvidhe Ltd. v. Union of India, 1996 (82) ELT 177 (Bom); Gujarat High Court judgments in Commissioner of Customs v. Mahalaxmi Exports, 2010 (258) ELT 217; Parle Internatio....
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....ffice for the purpose. All pending refund applications already made under the relevant provisions of the Indirect Tax Enactments for return of such deposits and which are pending with the authorities will also be treated as simple letters asking for return of the deposits, and will be processed as such. Similarly, bank guarantees executed in lieu of cash deposits shall also be returned." 26. Circular dated 2.1.2002 has been modified by subsequent Circular dated 20.6.2003 to the following effect: "It has been brought to the notice of the Board that the wordings in para 4 of the Circular, namely, "any deviation and resultant liability to interest on delayed refunds shall be viewed strictly" convey the impression that interest is liable to be granted for refund of pre-deposits even when there is no corresponding provision in the Central Excise Act, 1944. The matter has been examined and the sentence is re-worded as under: "Any deviation from the procedure explained hereinabove shall be viewed strictly." 27. There is one more Circular No. 802/35/2004-CX dated 8.12.2004 which provides that against an order where under refund is admissible to an assessee with regard to ....
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....rovision of interest under the scheme of the Act is also thoroughly misconceived and misplaced. When the Department acts illegally and not as per the scheme of the Act, the interest on such refund can never be provided for under the Scheme of the Act. If the authorities act as per the law, the question of granting interest on refund can be appreciated and considered as per the scheme of the Act. 6. Learned Senior Advocate for the petitioner cited various judgments in support of his contention that even in absence of any statutory provision, interest on refund is automatic and has to be granted on commercial principles. The Court finds force in the contentions of the learned Senior Advocate for the petitioner. The learned counsel has placed reliance on the decision of the Hon'ble Supreme Court in the case of Sandvik Asia Ltd. v. Commissioner of Income-tax, Pune (supra), wherein the Hon'ble Apex Court even while finding that there was no statutory provision to pay interest on delayed payment of interest, held the assessee entitled to the same on general principles and found that the assessee would be entitled to be compensated by way of interest on interest. It was further....