TaxTMI 
TaxTMI 
TaxTMI 
2018 (8) TMI 614
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....ent from the CPWD. At the relevant time, service-tax was payable on such service, and therefore, borne by CPWD which service tax component, the petitioner also deposited with the Service Tax Department. It is, however, undisputed that the Parliament amended the Finance Act, 1994 by insertion of Section 102 on 14th May 2016, but with retrospective effect from 1st April 2015 granting exemption from payment of service tax in certain cases relating to construction of government buildings for the period between 1st November 2015 to 29th February 2016. Section 102 reads as under : "Section 102 - Special provision for exemption in certain cases relating to construction of Government buildings - [1] Notwithstanding anything contained in Section 66B, no service tax shall be levied or collected during the period commencing from the 1st day of April 2015 [both days inclusive], in respect of taxable services provided to the Government, a local authority or a Governmental authority, by way of construction, erection, commissioning, installation, completion, fitting out, repaid, maintenance, renovation or alteration of - (a) a civil structure or any other original work meant predominantly....
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....ce tax and return it to CPWD. Under such circumstances, the petitioner applied before the Assistant Commissioner of Central Excise & Service Tax, Central Excise & Service Tax Division, Ajmerrespondent no. 4 herein on 9th August 2016 and claimed refund of service tax amount of Rs. 66,68,294/=. In response to such refund application, the said authority on 22nd August 2016 wrote to the petitioner and asked for certain clarifications. One of the issues raised in such notice was that the petitioner should submit documentary evidence to show that the tax for which the refund has been claimed has not been charged or realized from any person. In response to such communication, the petitioner gave a short reply on 28th September 2016 clarifying that a sum of Rs. 6,86,951/= was deposited by a sub-contractor, and therefore, the petitioner's claim for refund of service tax now stood revised to Rs. 59,81,343/=. On 7th November 2016, the petitioner addressed a further detailed communication to the respondent no. 4-Asstt. Commissioner of Central Excise & Service Tax, Ajmer in which besides raising legal contention in respect of the refund claim, the petitioner made the following prayer : [i] Al....
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....ilding [Phase 1-A] and Student Hostel at permanent campus of IIT, Gandhinagar, Near Village Palaj, Gandhinagar and Development works ie., Parking Sheds, W/S, Drainage network, pavements, irrigation system, street light cabling, etc. I also observe that as per condition of the work order, the assessee will submit running account bills alongwith performance of work done by them to the Department. After due verification by the appropriate authority, the amount is passed for payment and paid to the contractor through RTGS mode. I find that in the instant case, the assessee received an amount of Rs. 3,49,16,664/=; Rs. 2,49,99,843/=; Rs. 4,17,17,014/=; Rs. 50,52,138/= and Rs. 80,52,685/= which is evident from copies of statement containing the details of bills passed and payment of 6th to 9th running account bills and memorandum of payment for 2nd RA [Elec] issued by the Executive Engineer, IITGN, Project Division-I CPWD, Gandhinagar and Executive Engineer [Electric], IIT Project Electric Division, CPWD, Ahmedabad respectively which was submitted by the assessee, ledger account of IIT Gandhinagar Project from 01.04.2014 to 18.03.2016 and relevant portion of Bank statement of the assessee....
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....rest; if any, paid on such duty had not been passed on by him to any other person. I observe that in the instant case, the service tax paid by the assessee has been reimbursed vby the service recipient which is evident from the notice dated 18.05.2016 sent by CPWD, IIT, Gandhinagar Division-I to seek the refund from the Department and remit the amount of service tax to them, Ledger account of service tax [reimbursed] of the assessee from 06.01.2016 to 04.02.2016 alongwith relevant portion of bank statement issued by Baroda Rajasthan Kshetriya Gramin Bank, Vaishali Nagar under which service tax is credited [Supra]. I observe that in the instant case, the serviced tax paid by the assessee has been reimbursed by the service recipient which is evident from the notice dated 18.05.2016 sent by CPWD, IIT, Gandhinagar Division -1 to seek the refund from the department & remit the amount o0f service tax to them. Ledger account of service tax (reimbursed) of the assessee from 06.01.2016 to 04.02.2016 alongwith relevant portion of bank statement issued by Baroda Rajasthan Kshetriya Gramin Bank, Vaishali nagar, under which service tax is credited (Supra). From the above, it is establi....
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....17th April 2018 filed by the respondent no. 1 in which the following averments are made :- "[15] The action of the answering respondent which was initiated as per Clause 29/29A of GCC of the said Contract as the petitioner failed to refund the service tax reimbursed to him. The actions include following: (a) The withheld amount of Rs. 3,79,576/- in the final bill was released and this amount was adjusted as recovery (part) as the service tax amounting to Rs. 66,68,294/- has not been refunded by the petitioner. (b) The 3 nos FDRs submitted by the petitioner towards Security Deposit bearing Nos. 0262725, 0262726 and 0262727 were encashed amounting to Rs. 41,80,720/- and adjusted as recovery (part) as the service tax amounting to Rs. 66,68,294/- has not been refunded by the petitioner. (c) for recovery of balance due amounting to Rs. 21,07,998/-, request has been made to other CPWD Division where the petitioner is presently working. Since, the clause 29/29A provides for such an action and action taken by the respondents is well within the ambit of terms of contract the said action cannot be said to be illegal, arbitrarily and unjust." Having heard learned advocates for....
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....titution Bench decision in the case of Mafatlal Industries Limited v. Union of India, [1997] 5 SCC 536, in context of Section 11-B of the Central Excise Act, held and observed as under : "The said provision is made for obvious reasons. Though the duty under Section 11-B of the Act is payable by the manufacturer, a manufacturer would generally pass on the burden of the excise duty to the buyer or it may be some other person. It is for this reason, a person who is ultimately aggrieved with the payment of the said duty and challenges the order successfully can seek the refund. This becomes apparent from the reading of clause [e] to Explanation [B] appended to the aforesaid provision which is as under : "Explanation - For the purpose of this section - (B) 'relevant date' means - (e) in the case of a person, other than the manufacturer, the date of purchase of the goods by such person". Explanation [B] defines "relevant date". Though this date has reference to the calculation of limitation period for the purposes of seeking refund of the duty under the aforesaid provision. However, clause (e) while stating the "relevant date" clarifies that in case of a person, other than t....
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....as provided in Section 12-D." In the present case, it was therefore upto the CPWD to apply for refund of the service tax which was paid as per the law prevailing at the relevant time, but which became refundable on account of retrospective amendment in the law. The CPWD instead of applying for refund, itself insisted that the petitioner must apply and when the petitioner's application for refund was rejected by the Assistant Commissioner of Service Tax, Ajmer, CPWD found a novel way to recover the same from the petitioner by utilizing the petitioner's security deposit, unpaid amounts of final bill and the petitioner's running bills of other contracts. These are wholly impermissible means of recovery. The petitioner as a service provider was basically not even required to bear the service tax burden, as duty was to be collected from the service recipient and to be deposited with the Government revenue, if the service tax was payable. If the amount was refunded by the Service-tax Department, it was the duty of the petitioner to ensure that the same reaches the service recipient. If, however for whatever reason, the refund is not granted, surely the petitioner cannot be asked to be....
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....mer where the petitioner is assessed and the refund application was filed and rejected before the Ajmer authority. Strangely, counsel for CPWD also joined in the chorus. In so far as the action of CPWD authority is concerned, we have no doubt that the cause has arisen within the jurisdiction of this Court. The contract for construction of the building was executed at Gandhinagar. The building was constructed by the petitioner in the outskirts of Gandhinagar town. Payments were made and received within the State of Gujarat. The correspondence and actions taken by CPWD all arose within the jurisdiction of this High Court. We have no iota of doubt that this Court has territorial jurisdiction to examine the legality of the action of CPWD. The orders passed by the Assistant Commissioner of Central Excise & Service Tax, Ajmer of course have a territorial origination outside the State, however, these two actions and orders are inter-linked and cannot be separated one from the other for testing the legality. When the substantial, or in fact, the larger part of the cause of action can be said to have arisen within the State, we see no hesitation in exercising the jurisdiction even against t....