TaxTMI 
TaxTMI 
2020 (6) TMI 342
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.... by the respondents to this Court i.e. SERTA No.23/2018, has been dismissed on 24th August, 2018, declaring that the respondents had no right to retain the said money of the petitioner. 2. It is the case of the petitioner, (i) that an audit/investigation was conducted by the officers of the Service Tax Commissionerate, New Delhi, from 24th July, 2006 to 28th July, 2006, for the period 1st July, 2003 to 31st March, 2005 and a deposit of Rs. 2,38,00,000/- was made by the petitioner on 27th October, 2006, under protest, under pressure from the officers during the audit/investigation of the service tax records, as the officers insisted on the deposit by the petitioner, even without issuing any notice to show cause to the petitioner; (ii) that the petitioner, vide letter dated 30th October, 2006, informed the respondents that the deposit made on 27th October, 2006 was under protest and vide letter dated 26th February, 2007, informed the Joint Commissioner of Service Tax of the same and that despite lapse of a few months from the date of deposit, a show cause notice had not been received; (iii) that the Service Tax Department issued a show cause notice dated 28th July, 2008 to the petit....
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....l before this Court by filing SERTA No.23/2018, which was dismissed by this Court vide order dated 24th August, 2018, on the ground that no question of law arose; resultantly, the order of the Tribunal allowing the appeal of the petitioner was affirmed; (xi) that the petitioner again, on 11th March, 2019 sought refund of the amount aforesaid and on refund not being made, submitted reminders dated 16th April, 2019, 14th May, 2019 and 12th June, 2019; and, (xii) that the respondents, on the claim of the petitioner for refund, conducted a hearing on 20th August, 2019 but still failed to refund the said sum of Rs. 2,38,00,000/- to the petitioner. 3. The petition came up first before this Court on 13th December, 2019 and thereafter on 17th December, 2019, when notice thereof was issued and it was ordered that in case the amount sought by the petitioner is refundable, the respondents should ensure that the amount is refunded with interest within four weeks therefrom. However, till 25th February, 2020, neither refund had been made nor any action taken pursuant to the order dated 17th December, 2019. During the hearing on 25th February, 2020, the counsel for the respondents assured this C....
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.... attained finality and the only remedy available to the petitioner is of filing of a statutory appeal thereagainst before the competent authority. 6. A perusal of the final rejection refund order dated 13th September, 2019 shows that the same also does not dispute that the sum of Rs. 2,38,00,000/- deposited by the petitioner on 27th October, 2006 was under protest and the said order records, (I) that on the petitioner preferring appeal to CESTAT, because the petitioner had already deposited more than 50% of the tax element, though under protest, the condition of pre-deposit was waived; (II) that CESTAT set aside the impugned order dated 3rd October, 2011 only on the question of limitation; (III) that the petitioner had filed the refund claim well within the prescribed time; (IV) that vide Circular dated 16th September, 2014, where the appeal is decided in favour of the assessee, the assessee shall be entitled to refund of the amount deposited along with interest at the prescribed rate from the date of making of the deposit to the date of refund; (V) that the appeal preferred by the petitioner had been decided in favour of the petitioner only on the question of limitat....
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....opriate the amount of Rs. 2,38,00,000/- already deposited by the petitioner and demand with respect whereto has also been set aside. We have further enquired, whether not the said logic treats Rs. 2,38,00,000/- out of the total demand of Rs. 4,66,39,061/- differently from the balance, with the respondents being entitled to recover/appropriate Rs. 2,38,00,000/- but not being entitled to recover the balance demanded amount. It was not the case of the respondents before the Commissioner or before CESTAT or before this Court that the deposit by the petitioner of Rs. 2,38,00,000/- even though under protest, was within time and only the demand for the balance amount was barred by time and thus the amount of Rs. 2,38,00,000/- should be permitted to be appropriated. The Commissioner as well as the CESTAT dealt with the entire demand as one and set aside the same and now the same cannot be bifurcated. 9. Since the emphasis of the counsel for the respondents, during the hearing, also is on the Circular providing for refund of pre-deposit amount being not applicable to deposit under protest, we have further enquired, how and under what head have the respondents appropriated Rs. 2,38,00,000/-....
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....in the Nine Judge Bench's judgment of the Supreme Court in Mafatlal Industries Ltd. Vs. Union of India (1997) 5 SCC 536. Allowing the respondents to retain the said amount, would also be in violation of Section 72 of the Contract Act, 1872, obliging a person to whom money has been paid by mistake or under coercion, repay the same. The said provision enshrines the principle of unjust enrichment and restitution and the respondents State, by refusing to refund the sum of Rs. 2,38,00,000/-, are purporting to unduly enrich themselves. 13. We may however mention that the counsel for the petitioner also, perhaps to bring the case of the petitioner within the Circular relied upon, has sought refund of the amount by calling it "pre-deposit", when it was not deposited by way of pre-deposit but under protest, even before any demand was raised and while the petitioner was still being investigated against. Such deposits under protest, to ease the rigors which the Tax Authorities otherwise are entitled to impose, are not unknown and judicial notice has been taken thereof. However as long as the amount deposited is under protest and in which protest, as held in Mafatlal Industries Ltd. supra no ....
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....efund; (C) Hello Minerals Water (P) Ltd. Vs. Union of India 2004 SCC OnLine All 2187 (DB) where interest @ 10% per annum was granted; (D) Hindustan Coca-Cola Beverages Pvt. Ltd. Vs. Union of India 2013 SCC OnLine Guj 1487 (DB) where interest @ 9% per annum and future interest @ 6% per annum was granted; and, (E) Ebiz.com Pvt. Ltd. Vs. Commissioner of Central Excise, Customs & S.T. 2017 (49) S.T.R. 389 (All.) where costs of Rs. 50,000/- were imposed on the Department. 20. In the present case, as aforesaid, the amount of Rs. 2,38,00,000/- was deposited by the petitioner of its own volition, during the audit/investigation, though under protest and the petitioner has not chosen to detail the circumstances in which the petitioner felt compelled to make the deposit. The petitioner for the first time sought refund of the said amount vide letter dated 2nd May, 2018. 21. Considering the said facts, we do not find the petitioner entitled to interest at any higher rate than @ 6% per annum from the date of deposit i.e. 27th October, 2006 till the end of May, 2018 i.e. 31st May, 2018. However, we do not find any justification for the respondents retaining the said amount thereafter and ....