AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (12) TMI 1216
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....evant period. In the meantime, the Anti Evasion wing of the Service Tax Department conducted investigations into the Service Tax matters of the Appellant covering the relevant Period for which the said Invoice pertained. The Investigations concluded in the month of July 2019 and the investigating authorities were apparently satisfied with the issuance of the said invoice and its subsequent cancellation as no remarks contrary to the same were recorded. The Appellant states that after the conclusion of investigation in July 2019, the refund claim was filed on 29.11.2019 for refund of the amount paid against the said invoice since no service had been provided, and consequently, no consideration had been received from the recipient-client. 3. The period involved was post 2012 and the definition of "service" during the relevant point in time as per Section 65 B of the Finance Act, 1994 contemplated any activity carried out by a person for another person for consideration. In this case there is no consideration, and therefore, there is no service. In the present case, as the amount was deposited in anticipation of a service, which was never provided, the amount so deposited did not pa....
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....quently and service tax paid on the same has been claimed as refund. The cancelled invoice was not part of the turnover in the Profit & Loss Account in the concerned financial year. Hence the present appeal by the appellant before this Tribunal. 7. Learned Advocate appearing on behalf of the Appellant submits that the Appellant had not provided the service to M/s Kings Empire Heights Pvt. Ltd. and therefore, had canceled the tax invoice issued by the Appellant. During the course of investigation, this fact was explained. However, to prove its bonafides, the Appellant paid Rs.37,57,707/- vide Challan No 50064 dated 26.03.2018. Investigation got concluded in July 2019 but thereafter the Appellant was neither issued any show cause notice contemplating recovery of service tax along with interest and penalty for delayed payment nor was issued any order appropriating the amount paid by the Appellant as a service tax liability. Thus, the amount which was paid is not a tax amount in the absence of appropriation. The Appellant therefore filed refund claim which has been rejected on the ground of limitation by applying the provisions of Section 11B of the Central Excise Act, 1944 which in....
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....ation as what was paid by the appellant was not tax as envisaged under the Finance Act, 1994. Thus, the amount paid by the Appellant would not take the character of tax but is simply an amount paid under a mistake of law. The provisions of Section 11B ibid would, therefore, not be applicable to an application seeking refund thereof. Moreover, since the retention of the amount in issue by the department is without authority of law, the question of applying the limitation prescribed under Section 11B ibid would not arise. Even in case where any amount is paid by way of self assessment, if it has been paid by mistake or through ignorance, it is always open to the assessee to bring it to the notice of the authority concerned and claim refund of the amount wrongly paid. For a service to be taxable, it is necessary that the service has to be rendered by one person to another and without a perceived service money contribution cannot be held to be a consideration which is liable to tax. The authority concerned is duty bound to refund such amount as retention of such amount would be in violation of Article 265 of the Constitution of India which mandates that no tax shall be levied or collec....
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....ve Section, it refers to claim for refund of duty of excise only, it does not refer to any other amounts collected without authority of law. In the case on hand, admittedly, the amount sought for as refund was the amount paid under mistaken notion which even according to the department was not liable to be paid. 19. According to the appellant, the very fact that said amounts are paid as service tax under Finance Act, 1994 and also filing of an application in Form-R of the Central Excise Act would indicate that the applicant was intending to claim refund of the duty with reference to Section 11B, therefore, now it is not open to him to go back and say that it was not refund of duty. No doubt in the present case, Form-R was used by the applicant to claim refund. It is the very case of the petitioner that they were exempted from payment of such service tax by virtue of circular dated 17- 9-2004 and this is not denied by the Department and it is not even denying the nature of construction/services rendered by the petitioner was exempted from to payment of Service Tax. What one has to see is whether the amount paid by petitioner under mistaken notion was payable by the petition....
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....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. ... 19. In view of the above discussion and by respectfully following the judgements of the superior Courts, cited supra, the impugned orders cannot be sustained and are set aside. The appeal filed by the appellant is allowed with consequential relief." ii. M/s Techno Power Enterprises Private Limited [Service Tax Appeal No. 75972 of 2021] "16. I also find that the Hon'ble Karnataka High Court, while considering the issue at hand, had laid down a test in such cases. The Hon'ble High Court had held that what needs to be ascertained is whether the Revenue could have recov....
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....n. We are, therefore, of the view that the impugned order is unsustainable. 7. We accordingly allow the present appeals and quash and set aside the impugned order, insofar as it is against the appellant in both appeals. We fully allow refund of Rs.8,99,962/- preferred by the appellant. We direct that the respondent shall refund the amount of Rs. 8,99,962/- to the appellant within a period of three months. There shall be no order as to costs." ii. 3E Infotech vs. CESTAT [2018 (18) GSTL 410 (Mad.)] "9. In the above cited case, the Supreme Court stated that the Assessee's claim to refund would not be disallowed solely because it seemed barred by limitation. Since the Assessee in that case made the claim for refund shortly after learning about their entitlement for the same, it would not be just to hold that such claim is hit by laches ... 12. Further, the claim of the respondent in refusing to return the amount would go against the mandate of Article 265 of the Constitution of India, which provides that no tax shall be levied or collected except by authority of law. 13. On an analysis of the precedents cited above, we are of th....
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....ation for instituting a suit complaining about it. (See Section 22 of the Limitation Act, 1963). The Supreme Court through Mr. Justice Krishna Iyer opined in Shiv Shankar Dal Mills v. State of Haryana reported in AIR 1980 Supreme Court 1037 as follows:- 1. Where public bodies, under colour of public laws, recover people's money, later discovered to be erroneous levies, the Dharma of the situation admits of no equivocation. There is no law of limitation, especially for public bodies, on the virtue of returning what was wrongly recovered to whom it belongs. Now is it palatable to our jurisprudence to turn down the prayer for high prerogative writs, on the negative plea of 'alternative remedy' since the root principle of law married to justice, is ubi jus ibiremedium. 2. Another point, in our jurisdiction social justice is a pervasive presence; and so, save in special situations it is fair to be guided by the strategy of equity by asking those who claim the service of the judicial process to embrace the basic rule of distributive justice, while moulding the relief, by consenting to restore little sums, taken in little transactions, from little persons, to....
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....upra i.e. in consonance with clause (c) of Section 17(1) of the Limitation Act. He further adds that here the finding that tax was not recoverable is not in dispute and material to demonstrate that burden has been passed on employer Nagpur Municipal Corporation are not brought on record anywhere. The reliance upon clause 31 of agreement between respondent no. 1 and Nagpur Municipal Corporation to buttress this argument is misconceived. Said clause helps respondent and he therefore submits that no substantial question of law arises in the present matter. 7. The other contention is about the period of limitation. The appellant argues that recovery of tax by them is covered under second type as shown by the judgment of Apex Court in Mafatlal Industries case (supra) particularly paragraph no. 27. The Apex Court found where the tax is collected by the authorities under the Act by misconstruction or wrong interpretation of the provisions of the Act, Rules and Notification or by an erroneous determination of the relevant facts i.e. an erroneous finding of fact, claim for refund arises under the Act. The Hon'ble Apex Court has considered unconstitutional levy in first category....