2020 (1) TMI 431
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....reement for sale dated 08.03.2016 (pages 23 to 39 of Appeal Paperbook), the total sale consideration was Rs. 1,16,35,000/- together with Service Tax, including Cess of Rs. 5,06,122/-. Accordingly, Invoice dated 10.03.2016 was drawn up. The transaction of sale was completed in due course with the first sale consideration received by the appellant on 16.02.2016 vide cheque dated 16.02.2016 drawn in favour of the appellant by the said purchasers. The appellant, however, received only the payment towards sale value of the subject property excluding the Service Tax thereof. The same is duly reflected in the ledger account relating to the payments made by the aforesaid purchasers (pages 41 to 42 of Appeal Paperbook). On its own, the appellant discharged the full purported Service Tax liability of Rs. 5,06,122/-. Thereafter, only Rs. 65,000/- was received from the appellant's purchasers towards the said purported service tax liability. The appellant subsequently came to know that the transaction of sale of the subject property was an outright transfer of title in immovable property and, accordingly, not leviable to Service Tax as defined in Section 65B(44) read with 66E(b) of the Finance ....
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....ice' had been rendered by the appellant as defined in Section 65B(44) of the Act read with Section 66E(b) thereof. 4. Learned Advocate further submits that the disputed claim was not hit by the doctrine of unjust enrichment inasmuch as the burden of Service Tax had been borne entirely by the appellant-claimant and the same had not been passed on to the purchasers of the subject property in question. Necessary declaration in this regard had been made in the appellant's refund claim (page 57 of Appeal Paperbook). The buyer paid the basic consideration of Rs. 1,16,35,000/- and Rs. 65,000/- towards Service Tax. The said amount of Rs. 65,000/- had subsequently been returned back by the appellant, which fact has not been disputed at any stage of the proceedings. 5. Learned Advocate also submits that Section 73A of the Act could not have been invoked since it was never the Department's case that the appellant had collected any amount of Service Tax from its purchasers but had failed to dispute the same with the Government. Even if the appellant had failed to file its refund claim in the proper format, it is submitted that this is merely a procedural defect. Based on this ground the ap....
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....imitation would naturally be calculated taking into account the principle underlying Clause (c) of sub-section (1) of Section 17 of the Limitation Act, 1963. A refund claim in such a situation cannot be governed by the provisions of the Central Excises and Salt Act or the Customs Act, as the case may be, since the enactments do not contemplate any of their provisions being struck down and a refund claim arising on that account. In other words, a claim of this nature is not contemplated by the said enactments and is outside their purview." 11. Further, at paragraph 113 of the said judgement, the Hon'ble Court classified the various refund claims into three groups or categories:- "(I) The levy is unconstitutional - outside the provisions of the Act or not contemplated by the Act. (II) The levy is based on misconstruction or wrong or erroneous 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. (III) Mistake of law - the levy or imposition wasunconstitutional or illegal or not exigible in law (without....
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.... Para 32 - Clauses (3) and (4)]." 12. The Hon'ble Supreme Court in the case of Mafatlal (supra) at para 137 reiterated the proposition as laid down in Doaba Cooperative Sugar Mills case wherein the Supreme Court held that in applying Section 11B, an exception has been culled out in cases where the payment of duty was under a mistake of law (37 ELT 478 (SC), Para- 6-Last 4 lines). 13. The aforesaid propositions reveal that what one has to see is whether the amount paid by the assessee under a mistaken notion was payable or not. In other words, if the assessee had not paid those amounts, the authority could not have demanded from the assessee to make such payment. In other words, the department lacked authority to levy and collect such tax. In case, the department was to demand such payment, the assessee could have challenged it as unconstitutional and without authority of law. When once there is lack of authority to demand service tax or excise duty from the assessee, the department lacks authority to levy and collect such amount and the said amount is not "Service Tax" or "Excise duty" and Section 11B of the Act has no application in such cases. 14. The aforesaid view has als....
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....ibunal at para 8 notes that the Apex Court in Mafatlal has observed the exceptional situations wherein Section 11B is not attracted. The Tribunal has categorically noted that such a situation is not present in the said case before the Tribunal. 17. It is further submitted that the authoritative decisions of various High Courts as aforesaid stated were not brought to the knowledge of the Tribunal in the case of Veer Overseas (supra). The decision of the Hon'ble Bombay High Court in the case of Parijat was, however, referred to in the dissenting opinion. Relevant paragraphs in the case of Mafatlal were also not quoted and/or cited before the Tribunal. In the said circumstances, the said judgement in the case of Veer Overseas is clearly distinguishable both on facts and in law. 18. I find that after the larger Bench decision of the Tribunal in the case of Veer Overseas (supra), the Hon'ble High Court of Madras in the case of 3E Infotech vs. CESTAT, Chennai as reported in 2018 (18) G.S.T.L. 410 (Mad.) have held as under:- "8. The present appeal lies from the order of the Appellate Tribunal. We have heard the Learned Counsel for the Assessee and the State. The issue, which arises....
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....Oil and Natural Gas Corporation Ltd., v. Union of India, reported in 2017 (354) E.L.T. 577 (Guj.) relied on another judgment of the Gujarat High Court in Joshi Technologies International, INC-India Projects v. Union of India = 2016 (339) E.L.T. 21 (Guj.) and quoted the relevant paragraph, which reads as under :- "Merely because the provisions of the Central Excise Act, 1944 and the rules framed thereunder for collection and refund viz., the machinery provisions have been incorporated in the OID Act for collection and refund of the cess levied thereunder, it cannot be inferred that the Oil Cess imposed under the provisions of the OID Act assumes the character of central excise duty. The finding recorded by the adjudicating authority that the Oil Cess is in the nature of excise duty, is erroneous and contrary to the law laid down by this court in Commissioner v. Sahakari Khand Udyog Mandli Ltd. (supra). In the Circular dated 7th January, 2014, reference to sugar cess and tea cess levied under the Sugar Cess Act, 1982, and the Tea Act, 1953, respectively, is merely illustrative in nature and what is meant by the circular is that the cesses which are collected by the Department o....
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....ng its claim for refund of the amount paid under a mistake. Since Oil Cess is not a duty of excise, the amount paid by the petitioner by way of Education Cess and Secondary and Higher Secondary Education Cess, cannot in any manner be said to be a duty of excise inasmuch as what was paid by the petitioner was not a duty of excise calculated on the aggregate of all the duties of excise as envisaged under the provisions of Section 93 of the Finance Act, 2004 and Section 138 of the Finance Act, 2007. 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. The petitioner was therefore, wholly justified in making the application for refund under a mistake of law and not under section 11B of the Central Excise Act, 1944. Since the provisions of Section 11B of the Act are not applicable to the claim of refund made by the petitioner, the limitation prescribed under the said provision would also not be applicable and....
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....w has been taken by the Bombay High Court in the case of Parijat Construction v. Commissioner Excise, Nashik, reported in 2018 (359) E.L.T. 113 (Bom.), where the Bombay High Court has held as under :- 4. We are of the view that the issue as to whether limitation prescribed under Section 11B of the said Act applies to a refund claimed in respect of service tax paid under a mistake of law is no longer res integra. The two decisions of the Division Bench of this Court in Hindustan Cocoa (supra) and Commissioner of Central Excise, Nagpur v. M/s. SGR Infratech Ltd. (supra) are squarely applicable to the facts of the present case. 5. Both decisions have held the limitation prescribed under Section 11B of the said Act to be not applicable to refund claims for service tax paid under a mistake of law. The decision of the Supreme Court in the case of Collector of C.E., Chandigarh v. Doaba Co-Operative Sugar Mills (supra) relied upon by the Appellate Tribunal has in applying Section 11B, limitation made an exception in case of refund claims where the payment of duty was under a mistake of law. We are of the view that the impugned order is erroneous in that it applies the limitation pres....