AI Drafter 
TaxTMI 
TaxTMI 
2024 (10) TMI 218
X X X X Extracts X X X X
X X X X Extracts X X X X
.... "a. Whether the respondent, M/s Afflatus International was required to pay service tax under the reverse charge mechanism for 'manpower recruitment or supply agency'?" 2. The issue itself had arisen in the context of the Assistant Commissioner of Service Tax having rejected the refund claim made by the respondent-assessee. The Commissioner (Appeals), however, had come to conclude that the respondent-assessee was under no obligation to pay service tax under the reverse charge mechanism pertaining to manpower recruitment and supply agency services, since it had effected deposit of tax under a mistake of fact and law. 3. The scope and ambit of the challenge which came to be addressed before CESTAT would have to be appreciated be....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er amount collected without authority of law. Thus, it was held that section 11-B of the Excise Act would be applicable. The relevant observations are as follows: "18. From the reading of the above 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 int....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ar dated 17-9-2004, the payment made by the respondent company would not partake the character of "service tax" liable to be paid by them. Therefore, mere payment made by the respondent will neither validate the nature of payment nor the nature of transaction. In other words, mere payment of amount would not make it a "service tax" payable by them. When once there is lack of authority to demand "service tax" from the respondent company, the department lacks authority to levy and collect such amount. Therefore, it would go beyond their purview to collect such amount. When once there is lack of authority to collect such service tax by the appellant, it would not give them the authority to retain the amount paid by the petitioner, which was in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....efund cannot be barred by limitation, merely because the period of limitation under Section 11B had expired. Such a position would be contrary to the law laid down by the Hon'ble Apex Court, and therefore we have no hesitation in holding that the claim of the Assessee for a sum of Rs. 4,39,683/- cannot be barred by limitation, and ought to be refunded" 18. The Bombay High Court in M/s Parijat Construction vs Commissioner of Central Excise, Nashik also took a similar view and the observations are as follows: "5. 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....taken as payment made relatable to section 11-B of the Excise Act and, therefore, refund has to be allowed. The observations are as follows: "8. The learned counsel for the Department, relying on the judgment of the Hon'ble Supreme Court in Mafatlal Industries Ltd. and Others v. Union of India and Others [(1997) 5 SCC 536 = 1997 (89) E.L.T. 247 (S.C.)] would argue that even if the payment was made under a mistake, the refund can only be processed in terms of Section 11B of the Central Excise Act. In the above case, the Apex Court elaborately classified claim for refund into three groups or categories, vis-a-vis, (i) unconstitutional levy, (ii) illegal levy, and (iii) mistake of law, and held that the remedies involved in ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Act cannot be applied. The observations are as follows: "9. Section 11B of the Central Excise Act to be read with Section 83 of the Finance Act, 1994 are not applicable to the facts of the present case because, the amount paid by the petitioner is never under the Central Excise Tax nor under the service tax when there is no liability to make the payment of the amount and under the mistake of facts or under mistake of law or under both if any amount is deposited by the assessee, the same cannot be retained by the Union of India under the one or other pretext when a service provider is not liable to make payment of the service tax and if any payment is made, it cannot be covered under Section 116 of the Central Excise Act to be read ....