TaxTMI 
TaxTMI 
2024 (11) TMI 990
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.... * All the documentation including contact, invoices etc are issued from place outside the jurisdiction of the Deputy Commissioner; * The agreement between the service provider and appellant which is very crucial to the subject transaction stipulates that the same is immune from the jurisdiction of Indian courts. Only the court of England and Wales have the jurisdiction over any dispute to the agreement; * The Service Tax has not been paid by the appellant but by the service provider at Service Tax - 1 Kolkata Commissionerate; * Thus, there was no payment of service tax done under the jurisdiction of the Deputy Commissioner into the account of Service Tax Mumbai - VII Commissionerate; * The relevant notifications and section 103 of the Finance Act and legal provisions governing the refund matter talks about the service provider only indicating clearly that not the service recipient, but the service provider may be allowed to claim refund. The appellant was not a service provider but service recipient. 2.1 The Appellants is engaged in providing taxable services and are registered with the Service Tax authorities for the same. 2.2 They ....
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....nd rejected the appeal. 2.9 Aggrieved by the impugned order, appellants have filed this appeal before the CESTAT. 2.10 Appellant had filed an Miscellaneous Early Hearing Application in the matter, which was considered and allowed by the bench vide Miscellaneous Order No M/85022/2021 dated 27.01.2021 3.1 We have heard Shri Parsad Paranjape, Advocate for the Appellant and Shri Nitin M Tagade, Joint Commissioner, Authorized Representative for the revenue. 3.2 Arguing for the appellants learned Counsel made submissions in support of the appellants claim for the refund, which he summarized in the written submissions dated 1st February 2021, 16th March 2021 and 3rd May 2021. Submissions dated 1st February 2021 * Section 103 of the Act which authorised the Appellant to file the refund claim. It does not mandate filing of the refund only in the jurisdiction of the service provider. * Commissioner (Appeals) has held that the recipient of service is eligible to file the refund claim. As natural corollary it is but obvious that the said claim need not be filed within the jurisdiction of the service provider, especially in the absence of any mandate in law. ....
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....is not a binding law for the assessee. Secondly, in the case of manufactured goods, there is no facility of centralized registration which is present in service tax. Third, the said instructions do not envisage a case where the claimant is also a registered assessee with the department. Thus, reliance on the said instructions does not support Revenue's case. * Without prejudice to the above submission that the Appellant is entitled to file the refund claim in their own jurisdiction and even assuming without admitting that the lower authorities are right in holding that the refund claim ought to have been filed within the jurisdiction of the service provider, the appropriate approach for the lower authorities was to transfer the refund application with the concerned jurisdictional officer instead of returning the same to the Appellant. * Section 14 of the Limitation Act 1963, that in computing the period of limitation, time during which the claim was pursued before the officer with defect of jurisdiction should be excluded. This view has been upheld by the following decisions o Anurag Enterprises [ 2019 (369) ELT 1617 (Tri. - All.)] o Symbio Gener....
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....re itself has corrected the assessment and mandated the refund of tax, if any, collected during the period when the levy existed. Thus, in effect, the principle laid down by the Hon'ble Supreme Court in the ITC judgement, that refund can be granted only after assessment is modified is given effect to by the legislative action of annulling the earlier assessment and mandating compulsory refund subject to certain conditions. * It is further stated that the present refund application is filed by the Appellant in the capacity of a recipient of service, as recipient of service he is not in position to challenge the assessment made by the service provider while filing his returns. * Section 103 of the Finance Act,1944 was enacted with effect from 14.05.2016, whereas, the present refund application pertains to the period April 2015 to February 2016. If the person seeking refund should have sought modification of assessment order, the period for doing so i.e. filing appeal, would have been over for substantial part of the disputed period. Thus, the interpretation leading to expect performance of impossible has to be discarded. * The lower authorities have not rej....
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.... tax/ duty payment to the Government Exchequer. Whether such refund is admissible, and to whom, can be verified by the jurisdictional officers where the Service Tax was paid as per the then existing law, by the person required to pay the tax to the Government Exchequer i.e., the Service Provider. * The Service Tax is paid as per the self-assessment made in ST-3 returns and filed to prescribed jurisdictional officers. The jurisdictional offices can, based on the ST-3 returns, verify whether any excess Tax/Duty payment was made, and to what extent. * In case of M/s ITC Ltd [2019 (368) ELT 216 (SC)] Hon'ble Supreme Court has held that refund application is not maintainable in the case where the duty has been paid as per the assessment order (including self-assessment) which has not been challenged by way of an appeal before the appropriate authority, stating as follows: "41. It is apparent from provisions of refund that it is more or less in the nature of execution proceedings. It is not open to the authority which processes the refund to make a fresh assessment on merits and to correct assessment on the basis of mistake or otherwise. ..............
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....ecause the manufacturer/service provider has already recovered the same from him. Thus, though the refund claim can be filed by two different class or persons, it can be claimed only by one of the two. To ensure that it is not claimed by both, it is necessary that the refund claim whether filed by the service provider or anyone else is filed before the authority in whose jurisdiction such tax/ duty was paid. * Commissioner (Appeals) had distinguished the case laws cited by the appellant. Commissioner (Appeals) as observed that,- o in the case of Jindal Steel & Power Ltd Vs Commissioner referred to in the decision of Chambal Fertilisers &Chemicals Ltd Vs Commissioner of Central Excise, the reason for the findings was that the refund claim was rejected by both the authorities citing jurisdiction. In the case in hand, the claim was not rejected on merits but returned to the appellant for filing before/with appropriate authority, o in the case of Commissioner of Central Excise Pune - I Vs Fujitsu Consulting Pvt Ltd, the issue was rejection of refund because the invoice was addressed to their New Delhi office. The refund application was filed in Pune and duty was also ....
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.... * Since the person claiming the refund has not paid any service tax to the government exchequer, he cannot claim this refund. * Since the amount claimed as refund has not been paid by the service provider in his jurisdiction, but in the jurisdiction of Commissioner Service Tax Kolkata, where service provider is registered, the refund claim should have been filed before the appropriate authority in that jurisdiction. 4.3 This letter dated 08.12.2016 of Deputy Commissioner, returning the refund claim filed by the Appellants, was challenged by the appellants before the Commissioner (Appeal). Considering this letter to be an appealable order, Commissioner (Appeal) admitted the appeal and after hearing the Appellants, he decided the appeal as per the impugned order. By the impugned order, Commissioner (Appeal) agreed with the contentions made by the appellant, vis a vis their eligibility to file this refund claim as recipient of services, but disagreed on the ground of the jurisdiction of the Deputy Commissioner Division 9 Service Tax VII before whom the Appellants have filed the refund claim. In result he dismissed the Appeal filed by the Appellant. 4.4 Revenue ha....
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....t date, subject to the condition that Ministry of Civil Aviation or, as the case may be, the Ministry of Shipping in the Government of India certifies that the contract had been entered into before the 1st day of March, 2015. (2) Refund shall be made of all such service tax which has been collected but which would not have been so collected had sub-section (1) been in force at all material times. (3) Notwithstanding anything contained in this Chapter, an application for the claim of refund of service tax shall be made within a period of six months from the date on which the Finance Bill, 2016 receives the assent of the President." This section exempts certain specified services during the period 1st April 2015 to 29th February 2016, subject to fulfilment of certain conditions. It also provides for the refund of the Service Tax, which had been paid on these services during this period, provided the application for the refund of the same is made within six months from the date on which Finance Bill, 2016 received the assent of the President. This section has been considered by the Hon'ble Gujarat High Court, Hon'ble Bombay High Court and the Hon'ble High Court of....
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....etrospectively, the petitioner could not have as a matter of right claimed such exemption and/or even consequently the refund of the tax paid. As such the Union Government was not under any obligation to provide the exemption retrospectively and that too with refund of the tax already paid. By way of policy decision which was culminated into section 103 of the Finance Act, 2014, such an exemption was provided retrospectively and the refund was provided, however subject to subsection (3) of section 103 of the Finance Act, 2014. JSW Dharamatari Port Pvt Ltd [2019 (20) GSTL 721 (Bom)] "12. If we analyze Section 103 of the Finance Act, 1994, we may notice that sub­section (1) provides that notwithstanding anything contained in Section 66B, no service tax shall be levied or collected during the period from 01.04.2015 to 29.02.2016 in respect of services provided by way of construction, erection, commissioning or installation of original works pertaining to an airport or port under a contract which has been entered into before 01.03.2015. The condition imposed in sub­section (1) of Section 103 of the Act is that the Ministry of Civil Aviation or as the case may ....
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....he effect that, with the insertion of Section 103(1) of the Finance Act, 1994 the charge of service tax itself is deleted for the services specified therein by an Act of Parliament and the Appellant no longer remains "the person liable to pay the service tax" and therefore the question of assessing the tax does not arise. Further the argument advanced by the appellants to the effect that Sub-Section 2 of Section 103 further mandates that refund shall be made of all such service tax collected but which would not have been so collected had subsection (1) been in force at all material times, too has been rejected by the Hon'ble High Courts as is evident from these decisions. 4.7 The jurisdiction to process the refund claim filed under Finance Act, 1994, needs to be determined in terms of Section 83 of Finance Act, 1994 read with Section 11B and 12 E of Central Excise Act, 1944 and Rule 3 of the Service Tax Rules, 1994 read with Rule 3 of Central Excise Rules, 2002. These provisions are reproduced below: Central Excise Act, 1944 Section 2. Definitions. - In this Act, unless there is anything repugnant in the subject or context, - .......... ....
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.... who is subordinate to him. Central Excise Rules, 2002 RULE 3. Appointment and jurisdiction of Central Excise Officers. - (1) The Board may, by notification, appoint such person as it thinks fit to be Central Excise Officer to exercise all or any of the powers conferred by or under the Act and these rules. (2) The Board may, by notification, specify the jurisdiction of a Principal Chief Commissioner of Central Excise or Chief Commissioner of Central Excise, as the case may be, Principal Commissioner of Central Excise or Commissioner of Central Excise, as the case may be or Commissioner of Central Excise (Appeals) for the purposes of the Act and the rules made thereunder. (3) Any Central Excise Officer may exercise the powers and discharge the duties conferred or imposed by or under the Act or these rules on any other Central Excise Officer who is subordinate to him. Finance Act, 1994 Section 65B. Interpretations. - In this Chapter, unless the context otherwise requires,- (55) words and expressions used but not defined in this Chapter and defined in the Central Excise Act, 1944 (1 of 1944) or the rules made thereunder, s....
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.... 'any agreement' for or in relation to such export and in the context the expression 'the agreement' would refer to that agreement which is implicit in the sale occasioning the export." In Shri Ishar Alloy Steels Ltd. vs. Jayaswals Neco Ltd. [2001 (3) SCC 809] has held:- "9. ...'The' is the word used before nouns, with a specifying or particularizing effect as opposed to the indefinite or generalizing force of 'a' or 'an'. It determines what particular thing is meant; that is, what particular thing we are to assume to be meant. 'The' is always mentioned to denote a particular thing or a person." 10. There are only two articles 'a (or an)' and 'the'. `A (or an)' is known as the Indefinite Article because it does not specifically refer to a particular person or thing. On the other hand, 'the' is called the Definite Article because it points out and refers to a particular person or thing. There is no doubt that, if Parliament intended that any proper officer could have exercised power under Section 28 (4), it could have used the word 'any'. 11. Parliament has employed the article "the" not accidently but with the intention to designate the proper of....
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.... officer, who has not passed the original order of assessment, to reopen the assessment on the grounds that the duty was not paid/not levied, by the original officer who had decided to clear the goods and who was competent and authorized to make the assessment. The nature of the power conferred by Section 28 (4) to recover duties which have escaped assessment is in the nature of an administrative review of an act. The section must therefore be construed as conferring the power of such review on the same officer or his successor or any other officer who has been assigned the function of assessment. In other words, an officer who did the assessment, could only undertake re-assessment which is involved in Section 28 (4)." 4.9 We use the same framework to analyze the provisions of Section 11B, in relation to determine the jurisdiction in which the refund claim should have been filed. Relevant part of Section 11 B of Central Excise Act, 1944, which has been made applicable by the Section 83 of Finance Act, 1994, for the refunds in case of Service Tax is reproduced below: 4.10 From the perusal of both sub section 1 and sub section 2 of Section 11 B, it is evident that the phrase "A....
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....(B) , the jurisdiction of the Principal Commissioners of Central Excise as specified in column (3) of Table III(A) , the jurisdiction of the Commissioners of Central Excise as specified in column (3) of Table III(B) , the jurisdiction of Commissioners of Central Excise (Appeal) or the Commissioners of Central Excise ( Audit ) as specified in column (3) of Table IV and appoints the officers specified in columns (2) and (3) of Table V and the subordinate officers posted under them as Central Excise Officers having jurisdiction over the Central Excise assessees registered in the territorial jurisdiction of the Principal Commissioners or the Commissioners of Central Excise, as the case may be, specified in column (4) of the said Table, for the purposes of the Central Excise Act, 1944 (1 of 1944) and the rules made there under, namely :- 4.13 Also a notification assigning the territorial jurisdiction in terms of clause (b) of section 2 of the Central Excise Act, 1944 (1 of 1944), read with clause (55) of section 65B of the Finance Act 1994 (32 of 1994), rule 3 of the Central Excise Rule, 2002 and rule 3 of the Service Tax Rules, 1994, has been issued by the Central Board of Excise an....
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....rule (1) rule 3 of the Central Excise Rules, 2002, the Central Board of Excise and Customs appoints the officers specified in column (2) of the table below as Central Excise Officers and invests them with all the powers of Central Excise Officers specified in column (3) of the said table to be exercised within such jurisdiction and for such purposes as specified in columns (4) and (5) of the said table respectively Serial No Officer Central Excise Officers whose powers are to be exercised Jurisdiction Purpose (1) (2) (3) (4) (5) 1 Protocol Officer(II), Ministry of External Affairs, New Delhi Assistant or Deputy Commission er of Central Excise New Delhi Receiving of the refund claims filed by diplomatic missions or consulates or diplomatic agents or career consular officers under section 11B of the Act 2 Joint Secretary (Protocol), Government of Maharashtra Assistant or Deputy Commission er of Central Excise Maharashtra Receiving of the refund claims filed by diplomatic missions or consulates or diplomatic agents or career consular officers under section 11B of the Act 3 Joint Secretary (Protocol), Government of West ....
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....m. Then what happens is that after an year, five years, ten years, twenty years or even much later, a decision is rendered by a High Court or the Supreme Court in the case of another person holding that duty was not payable or was payable at a lesser rate in such a case. (We must reiterate and emphasize that while dealing with this situation we are keeping out the situation where the provision under which the duty is levied is declared unconstitutional by a court; that is a separate category and the discussion in this paragraph does not include that situation. In other words, we are dealing with a case where the duty was paid on account of misconstruction, mis-application or wrong interpretation of a provision of law, rule, notification or regulation, as the case may be.) Is it open to the manufacturer to say that the decision of a High Court or the Supreme Court, as the ease may be, in the case of another person has made him aware of the mistake of law and, therefore, he is entitled to refund of the duty paid by him? Can he invoke Section 72 of the Contract Act in such a case and claim refund and whether in such a case, it can be held that reading Section 72 of the Contract Act al....
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....ssees all over the country are filing refund claims within three years of such decision, irrespective of the fact that they may have paid the duty, say thirty years back, under similar provisions - and their claims are being allowed by courts. All this is said to be flowing from Article 265 which basis, as we have explained hereinbefore, is totally unsustainable for the reason that the Central Excise Act and the Rules made thereunder including Section 11B/Rule 11 too constitute "law" within the meaning of Article 265 and that in the face of the said provisions - which are exclusive in their nature - no claim for refund is maintainable except under and in accordance therewith. The second basic concept of law which is violated by permitting the above situation is the sanctity of the provisions of the Central Excises and Salt Act itself. The Act provides for levy, assessment, recovery, refund, appeals and all incidental/ancillary matters. Rule 11 and Section 11B, in particular, provide for refund of taxes which have been collected contrary to law, i.e., on account of a mis-interpretation or mis-construction of a provision of law, rule, notification or regulation. The Act provides for ....
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.... 265 and any collection or retention of tax in accordance or pursuant to the said provisions is collection or retention under "the authority of law" within the meaning of the said article. In short, no claim for refund is permissible except under and in accordance with Rule 11 and Section 11B. An order or decree of a court does not become ineffective or unenforceable simply because at a later point of time, a different view of law is taken. If this theory is applied universally, it will lead to unimaginable chaos. It is, however, suggested that this result follows only in tax matters because of Article 265. The explanation offered is untenable as demonstrated hereinbefore. As a matter of fact, the situation today is chaotic because of the principles supposedly emerging from Kanhaiyalal and other decisions following it. Every decision of this Court and of the High Courts on a question of law in favor of the assessee is giving rise to a wave of refund claims all over the country in respect of matters which have become final and are closed long number of years ago. We are not shown that such a thing is happening anywhere else in the world. Article 265 surely could not have be....
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....cree, order or direction. 36. Section 27 of the Customs Act as amended by Finance Act, 2011 provides that any person claiming refund of any duty or interest paid or borne by him, may make an application in such form and manner as may be prescribed for such refund to the Assistant or Deputy Commissioner of Customs before the expiry of one year from the date of payment of such duty or interest. If an application for refund has been made before Finance Bill received the assent of the President, it is deemed to be filed under the provision of section 27 (1) as existed and to be dealt with under section 27(2). The period of limitation of one year provided by the provisions of section 27 has to be computed in the case of goods which are exempt from payment of duty by a special order issued under section 25(2) from the date of issue of such an order as provided in section 27(1B)(a). Where the duty becomes refundable as a consequence of any judgment, decree, order or direction of the appellate authority, Appellate Tribunal or any Court, the limitation of one year shall be computed from the date of such judgment, decree, order or direction. It is provided in Section 27(1B)(c) that ....
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....g its order. If this position is accepted then the provisions for adjudication in the Act and the Rules, the provision for appeal in the Act and the Rules will lose their relevance and the entire exercise will be rendered redundant. This position, in our view, will run counter to the scheme of the Act and will introduce an element of uncertainty in the entire process of levy and collection of excise duty. Such a position cannot be countenanced. The view was taken by us also gains support from the provision in sub-rule (3) of Rule 11 wherein it is laid down that whereas a result of any order passed in appeal or revision under the Act, refund of any duty becomes due to any person, the proper officer may refund the amount to such person without his having to make any claim in that behalf. The provision indicates the importance attached to an order of the appellate or revisional authority under the Act. Therefore, if an order which is appealable under the Act is not challenged then the order is not liable to be questioned and the matter is not to be reopened in a proceeding for the refund which, if we may term it so, is in the nature of execution of a decree/order. In the case at hand,....
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....r otherwise. 42. It was contended that no appeal lies against the order of selfassessment. The provisions of Section 128 deal with appeals to the Commissioner (Appeals). Any person aggrieved by any decision or order may appeal to the Commissioner (Appeals) within 60 days. There is a provision for condonation of delay for another 30 days. The provisions of Section 128 are extracted hereunder: "128. Appeals to [Commissioner (Appeals)]. - - - (1) Any person aggrieved by any decision or order passed under this Act by an officer of customs lower in rank than a [Principal Commissioner of Customs or Commissioner of Customs] may appeal to the [Commissioner (Appeals)] [within sixty days] from the date of the communication to him of such decision or order: [Provided that the Commissioner (Appeals) may, if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of sixty days, allow it to be presented within a further period of thirty days.] [(1A) The Commissioner (Appeals) may, if sufficient cause is shown, at any stage of hearing of an appeal, grant time, from time to time, to the parties ....
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....rmitted nor conditions of exemption can be adjudicated. re-assessment is permitted only under Section 17(3)(4) and (5) of the amended provisions. Similar was the position prior to the amendment. It will virtually amount to an order of assessment or re-assessment in case the Assistant Commissioner or Deputy Commissioner of Customs while dealing with refund application is permitted to adjudicate upon the entire issue which cannot be done in the ken of the refund provisions under Section 27. In Hero Cycles Ltd. v. Union of India 2009 (240) ELT 490 (Bom.) = 2009-TIOL-317- HC-MUM-CUS though the High Court interfered to direct the entertainment of refund application of the duty paid under the mistake of law. However, it was observed that amendment to the original order of assessment is necessary as the relief for a refund of claim is not available as held by this Court in Priya Blue Industries Ltd. (supra). 45. Reliance was also placed on a decision of Rajasthan High Court with respect to service tax in Central Office Mewar Palace Org. v. Union of India 2008 (12) STR 545 (Raj.). In view of the aforesaid discussion, we are not inclined to accept the reasoning adopted by the High ....
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....d by the officer of Custom lower in the rank than the Principal Commissioner of Customs or Commissioner of Customs. An appeal can be filed before the Commissioner (Appeals) in terms of section 128 of the Customs Act. Unlike Service Tax, in customs even though self assessment is done by the assessee, but the same is verified and allowed the clearances by the Custom officer on the Bills of Entry. It is that Bills of entry which is treated as order of assessment and any aggrieved person can file appeal against such assessment order of Bills of entry. In the Service Tax matter, the assessee simply file the ST-3 return and no order is passed by the departmental officer which can be challenged by way of filing appeal before the Commissioner (Appeals). The appeal provision of the Service Tax matter is provided under section 85 of the Finance Act, 1994 which is reproduced below: "Appeals to the Commissioner of Central Excise (Appeals).- 85 (1) Any person aggrieved by any decision or order passed by an adjudicating authority subordinate to the Principal Commissioner of Central Excise or Commissioner of Central Excise may appeal to the Commissioner of Central Excise (Appeal....
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....abad in para 5, is expressly contrary to para 45 of the decision of Hon'ble Apex Court in case of ITC, wherein court expressed its disagreement with the reasoning adopted by the Hon'ble Rajasthan High Court stating, "In view of the aforesaid discussion, we are not inclined to accept the reasoning adopted by the High Court, that too is also not under the provisions of the Customs Act." The reasoning adopted by the Hon'ble High Court and disagreed to by the Hon'ble Apex Court, is reproduced below: "At the outset, it may be observed, that under the scheme of things, starting from Section 73 onwards it is clear, that the assessee himself is to deposit service tax in form ST-3, there is no provision for assessment. Passing of assessment order is contemplated only in cases where the notice is issued under Section 73, and it is found, that service tax is not levied or paid, or has been short levied or short paid etc. In that view of the matter, the very basis/reasonings given by the learned Tribunal, simply have no legs to stand. Admittedly, the appeal under Section 85 lies against a specific order of the concerned authority in Form ST-4, which requires to disclose, designation a....
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....rovisions of,- * Section 27 of the Customs Act, 1962; * Section 11 B of Central Excise Act, 1944; and * Section 83 of Finance Act, 1994 read with Section 11 B of Central Excise Act, 1944. 4.22 In the present case we are not concerned with the case of rejection of refund. Hence in our discussions the reference to these decisions in per se, not to suggest the rejection of the refund claims on the ground of non filing of appeal against the assessment done. We have referred to these decisions to establish integral connection between the processing of the refund claim and the assessment made for payment of duty/ tax in the prescribed manner at the prescribed documents. As per the decisions rendered by the Hon'ble Apex Court in the cases starting from Mafatlal Industries to that ITC Ltd., it is evident that refund of tax/ duty is integral part of the assessment made and cannot be examined/ processed in vacuum, separately. In light of such a view that emerges it is not difficult to hold that only that officer who had assessed or could have assessed the returns filed by the assessee initially, is only empowered under Section 11B to process the refund claims fi....
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....rinciple in law that any exemption from tax is an exception and need to be claimed by the person who wish to avail the benefit of this exemption. The benefit of exemption needs to be claimed by the concerned person in the manner as provided in law. A five member constitutional bench of Hon'ble Apex Court, in case of Hari Chand Shri Gopal [2010 (260) E.L.T. 3 (S.C.)] held as follows: "22. The law is well settled that a person who claims exemption or concession has to establish that he is entitled to that exemption or concession. A provision providing for an exemption, concession or exception, as the case may be, has to be construed strictly with certain exceptions depending upon the settings on which the provision has been placed in the Statute and the object and purpose to be achieved. If exemption is available on complying with certain conditions, the conditions have to be complied with. The mandatory requirements of those conditions must be obeyed or fulfilled exactly, though at times, some latitude can be shown, if there is a failure to comply with some requirements which are directory in nature, the non-compliance of which would not affect the essence or substance of t....
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....ces of each case and the purpose and object to be achieved and the context of the prerequisites which are essential to achieve the object and purpose of the rule or the regulation. Such a defence cannot be pleaded if a clear statutory prerequisite which effectuates the object and the purpose of the statute has not been met. Certainly, it means that the Court should determine whether the statute has been followed sufficiently so as to carry out the intent for which the statute was enacted and not a mirror image type of strict compliance. Substantial compliance means "actual compliance in respect to the substance essential to every reasonable objective of the statute" and the court should determine whether the statute has been followed sufficiently so as to carry out the intent of the statute and accomplish the reasonable objectives for which it was passed. Fiscal statute generally seeks to preserve the need to comply strictly with regulatory requirements that are important, especially when a party seeks the benefits of an exemption clause that are important. Substantial compliance of an enactment is insisted, where mandatory and directory requirements are lumped together, for in suc....
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.... of periodical returns at the recipient unit, so as to take the shelter under the doctrine of substantial compliance for remission of duty. Respondents pointed out that they had identical columns in the registers kept at the recipient end, hence, the requirement of maintaining separate register at the supplier end and the requirements of Chapter X was substantially complied with. It may be noted that RG-16 Register prescribed was specific to Chapter X with the sole intention of maintaining separate accounts for receipt, issue and usage of duty free remitted inputs received from the supplier unit. Similarity of columns and the details furnished therein cannot be considered as substitute for not maintaining of RG-16 Register or other registers for remission of duty under Chapter X. 27. We have already indicated that, at the supplier end, no registration under Rule 174 was obtained and no records were kept. The applicants, at the recipient end, were also legally obliged to give various declarations in the statutory forms so as to claim exemption and such declarations admittedly were not made. Non-compliance of those conditions enumerated under various rules in Chapter X of th....
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....paid the service tax as applicable without availing the benefit of this exemption, without adhering to the Rule 6. Admissibility of an exemption under a taxing statue needs to be determined qua the person making the payment of tax to the exchequer and not qua the purchaser/ recipient of goods/ services. 4.26 If the Service Provider has paid the Service Tax even in respect of the goods subsequently exempted by way of Section 103, the appellants are/ were entitled to take CENVAT Credit of the Service Tax paid. If they have availed the credit the same could not have been questioned in view of the decision of Hon'ble Bombay High Court in case of Anjikya Enterprises, supra. The jurisdictional authorities with whom the appellants is registered without an iota of doubt are concerned with the CENVAT Credit of the tax paid, and any dispute or benefit associated with the same needs to be claimed from them only. By way of this application claiming refund, appellant are seeking to encash the CENVAT Credit that is available to them which is not permissible as per the provisions of Chapter V of Finance Act, 1994 and the CENVAT Credit Rules, 2004. 4.26 By reading of the Section 11B of the C....
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....n respect of the admissibility of the refund claim filed by the service recipient. The tribunal has decided the issue following the decision of Hon'ble Apex Court in case of Mafatlal Industries [1987 (89) ELT 247 (SC)] para 90, held that refund claim filed by the service recipient is admissible. The relevant paragraphs from that decision are reproduced below: "4. The appellant initially applied for refund to the service tax authorities at Navi Mumbai. By the order dated 05.04.2011, the Assistant Commissioner, Service Tax Division-V rejected the refund claim on the ground that the application for refund should be made before the Commissionerate within whose jurisdiction the applicant operates, on the principle that the person who has borne the incidence of duty was required to file a refund claim, before its jurisdictional officer. 5. Thereafter the claim for refund application was preferred before the Assistant Commissioner, Bareilly. By the order dated 23.12.2011 the Assistant Commissioner, Bareilly sanctioned the refund as sought. Revenue preferred an appeal which was allowed by the Commissioner (Appeals), Meerut by the impugned order dated 16.04.2012. The appel....
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....roval of such irrelevant and inappropriate conduct of statutory authorities, particularly when exercising quasi-judicial jurisdiction, in disregarding the clearly declared law, which is a binding precedent, in particular in the context of Article 141 of the Constitution. As a consequence of such vagrant analysis by the ld. Commissioner (Appeals), the appellant herein has been put to avoidable litigation trauma in preferring this appeal to this Tribunal and an unwarranted appellate burden as well." 4.28 The appellant in case of Indian Farmer Fertilizer Cooperative Ltd, supra did not challenged the order dated 5.04.2011 rejecting the refund claim before Assistant Commissioner, Service Tax Division-V but challenged the order dated 16.04.2012 of the Commissioner (Appeal), in case of the refund claim filed by them before Assistant Commissioner Central Excise Bareilly. The issue not considered and decided by the tribunal in that case was in respect of the jurisdiction in which the said claim was to be filed. Hence to that extent that decision is sub-silento. This decision was followed by the tribunal in case of Jindal Steel & Power Ltd [2015-TIOL-2000-CESTAT-DEL], holding as follows: ....
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....ellant had filed its initial refund claim within the prescribed period, before the Deputy Commissioner, New Delhi on 21.03.2012. The ld. appellate Commissioner however concluded that the refund claim cannot be entertained since the provider of the service was within the jurisdiction of the Delhi Commissionerate and therefore the refund claim should be entertained by the Delhi Commissionerate and not the Bilaspur Commissionerate. 6. The fact that the recipient of the service is also entitled to file a claim for refund is no longer res-integra. The issue stand concluded by the Constitution Bench decision in Mafatlal Industries Limited vs. Union of India - 1997 (89) ELT 247 (SC) . This decision was followed in Indian Farmer Fertilizer Co-op. Ltd., vs. CCE, Meerut-II - 2014 (35) STR 422 (Tri. Del.) . If the appellant which is a recipient of a service which is admittedly not taxable files a claim for refund within the prescribed period of limitation, it is axiomatic that it is entitled to do so before the Commissionerate under whose jurisdiction it pursues its taxable activities, business or is a registrant; or before the Commissionerate having authority over the provider of th....
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....ng for and obtaining the refund where he can satisfy that the burden of the duty has been borne by him alone. Such a person can apply within six months of his purchase as provided in Clause (e) of Explanation-B appended to Section 11B. It is, therefore, not correct to contend that the impugned provisions do not provide for refunding the tax collected contrary to law to the person really entitled thereto. A practical difficulty is pointed out in this behalf by the learned Counsel for appellants-petitioners : it is pointed out that the manufacturer would have paid the duty at the place of "removal" or "clearance" of the said goods but the sale may have taken place elsewhere; if the purchaser wants to apply for refund - it is submitted - he has to go to the place where the duty has been paid by the manufacturer and apply there. It is also pointed out that purchasers may be spread all over India and it is not convenient or practicable for all of them to go to the place of "removal" of goods and apply for refund. True it is that there is this practical inconvenience but it must also be remembered that such claim will be filed only by purchasers of high priced goods where the duty compon....
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....be remembered that "demand" and "refund" are merely two sides of the same coin namely assessment of goods to Central Excise duty. The goods in this case are "naptha". These have been subjected to excise duty at the factory in which the same were manufactured namely the refinery. In this case, it is to be noted that, the said naptha was manufactured by M/s I.O.C. The same was despatched to M/s. BPCL on payment of full duty. The appellants had purchased the said naptha from M/s. BPCL on payment of a price which included full excise duty. The conclusion as to whether the payment of duty by the refinery, in respect of the consignments cleared to the appellants was in excess of the payment due under the law or otherwise has to be arrived at by the Central Excise officers in charge of the refinery. The learned Commissioner (Appeals) in his findings has correctly held that M/s. IOC, the manufacturer could not have had the knowledge of the intended use of a portion of naptha that was to be eventually sold by their buyer viz. BPCL, to claim concessional payment of duty. In order to enable the assessing officers to come to such a conclusion, it is necessary that, the manufacturer who has pai....
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....er. Therefore, the AC Central Excise in charge of appellant's factory has no jurisdiction to entertain the refund claim in question. The claim has, therefore, been correctly rejected on the ground of locus standi." This order of tribunal was appealed before the Hon'ble Apex Court has dismissed the appeal [2015 (318) ELT 617 (SC)] filed by the Appellant holding that the refund claim was filed beyond the period of limitation. On the issue of jurisdiction, however, Hon'ble Apex Court categorically held that the Assistant Commissioner having jurisdiction over the refinery from where the goods were cleared on payment of duty had jurisdiction to decide on the refund claim. The observations made by the Hon'ble Apex Court are reproduced below: "9. The second reason given by the CESTAT, as mentioned above, is that the appellant had preferred this application before a wrong authority. Here we find that the appellant had filed the refund claim before the Central Excise Authorities at Durgapur. The appellant had purchased the material from IOCL which is having its refinery at Durgapur. The show cause notice was also issued by the Superintendent of Central Excise at Durgap....
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....turns with Commissionerate-I and as such filed the refund claim with Commissionerate-I only. As such the refund claim was filed with the Commissionerate having jurisdiction over them. If Commissionerate-I was not having jurisdiction, it was for the authorities to say so and not to decide their refund claim. He also submits that the refund has already been sanctioned to them and the division of the Commissionerate is only for ease of working and the department is one only and the refund actually sanctioned by the authorities cannot be rejected on the hyper technical grounds. 5.1 After hearing the Ld. DR, I find that there is no dispute about the facts and nor about legal issue and the appellant's entitlement to the refund of the accumulated Cenvat credit. The only ground on which the Commissioner (Appeals) has set aside the order of the lower authority sanctioning refund is that the officer was not having jurisdiction in as much as the refund should have been filed with Commissionerate-III. In the absence of any dispute about legality of the refund claim or about appellant's entitlement to the same, I find that setting aside the order by the Commissioner (Appeals) i....
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.... those powers which have not been conferred upon that authority in terms of the notification issued under Rule 3 of Service Tax Rules, 1994 read with Rule 3 of Central Excise Rules, 2002. 4.36 We are also not inclined to agree with the submissions made by the Appellant, that the Supplementary Instructions, issued by the Board and referred by the Commissioner (Appeal) while rejecting the appeal filed by them shall not apply to cases of refund under Chapter V of the Finance Act, 1994, because under Central Excise every factory of the manufacturer is registered as separate entity, whereas Service Tax law provides for the centralized registration. The argument should fall as the service provider and service recipient in the present case are not covered by the same centralized registration. Centralized registration is qua the different premises of the same person from where he provides the taxable service. Centralized registration is not in respect of different persons/ entities, who are in respect of particular transaction bound by the relationship of service provider and service recipient. 4.37 Appellants have in their submission argued on the issue of limitation, relying on cer....
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....thereunder. Section 11B of the Central Excises and Salt Act and Section 27 of the Customs Act, both before and after the 1991 (Amendment) Act are constitutionally valid and have to be followed and given effect to. Section 72 of the Contract Act has no application to such a claim of refund and cannot form a basis for maintaining a suit or a writ petition. All refund claims except those mentioned under Proposition (ii) below have to be and must be filed and adjudicated under the provisions of the Central Excises and Salt Act or the Customs Act, as the case may be. It is necessary to emphasise in this behalf that Act provides a complete mechanism for correcting any errors whether of fact or law and that not only an appeal is provided to a Tribunal - which is not a departmental organ - but to this Court, which is a civil court." 5.1 In view of discussions as above we do not find any merits in the appeal filed and dismiss the same. (Pronounced in open court on 28 June, 2021) (Sd/-) Sanjiv Srivastava Member (Technical) (Sd/-) (Dr. Suvendu Kumar Pati) Member (Judicial) Difference of Opinion PER: DR. SUVENDU KUMAR PATI 6. I have the occa....
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....an application can only be filed before the Deputy Commissioner/Assistant Commissioner of Central Excise where the tax was collected despite the fact that plethora of decisions exist to the contrary. He even had gone to the extent of distinguishing some of the factual context of those decisions with the case in hand, which can be dealt subsequently in the later part of this order as at this stage my observations on the factual backdrops is on a different direction which I consider to place on record at the first instance. 8.1 There are two legal issues involved concerning procedural requirements to be followed by the adjudicating authority and the Commissioner (Appeals). First, there exist no provision that authorized the adjudicating authority to return the claim application without taking a decision on it. Second, Commissioner (Appeals)' empowerment to entertain such a covering letter intimating return of refund application as a decision or order and entertaing an appeal against such letter correspondence. I have not come across any such provision in the indirect taxation statute/rules but it is a common knowledge that when there is no specific provision available, reference t....
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.... letter from the Additional Accounts Officer concerning payment of duty was acknowledged, which procedure has become absolate in this centralised filing system. 10. It would be inappropriate to depart from the observation made by my Learned Brother in para 4.29 and 4.30 of his order since it would look like sitting in an appeal over the decision arrived by the other Member of the Bench as his reasoning is available with me. However going by the case of Mafatlal Industries that has highlighted the practical difficulty in filing a refund claim by a purchaser at the place of removal namely at the factory site it can be observed that such a proposition was argued before the Court without a legal provision backing the same and Hon'ble Apex Court had refused to accept the submissions as valid proposations to set aside 1991 Amendment Act. As such when no provision is available in the statute or in the Amended Act that would stipulate filing of refund claim at the place of removal of the goods by the purchaser, analysis of the same to counter the argument of the learned Counsel for the appellants- petitioners would never act even as an orbiter dicta under the rule of precedent. Like....
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....ground facts, leading to the difference of opinion by the learned Members in the Division Bench, in a nut shell, are that the appellants herein M/s. Nhava Sheva (India) Gateway Terminals Pvt. Ltd., during the material period, had entered into an agreement dated 29.09.2014 with M/s. ITD Cementation India Ltd. (M/s. ITD), Kolkata for receiving construction services at Nhava Sheva Port. Construction services pertaining to a port was exempted from payment of service tax in terms of Sr. No.14(a) of the Notification No. 25/2012 dated 20.06.2012. However, w.e.f. 01.03.2015, vide Notification No. 6/2015-ST dated 01.03.2015, the said exemption provided under the earlier notification dated 20.06.2012 was withdrawn, by omitting the words "an airport, port or...". Owing to the reason of withdrawal of the exemption, the service provider M/s. ITD had started collecting service tax from the appellants and paid the same into the Government exchequer. The Finance Act, 2016 has amended the Finance Act, 1994 by way of insertion of Section 103 therein. As a result of addition of the said section, the exemption from payment of service tax, earlier provided under the Notification dated 20.06.2012 was re....
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.... application, the learned Members in the Division Bench had differed in their opinion and accordingly, the matter was referred by the Hon'ble President of the Tribunal, to me as a Third Member, for resolving such dispute. Points of difference between the learned Member (Technical) and learned Member (Judicial) of the Bench have already been set out in the preceding paragraphs. However, for ease of reference, the issues of difference, views expressed by both the learned Members and relevant paragraphs recorded in the Interim Order No. 04/2021 dated 28.06.2021 are set out in a tabular form, as under:- Sl. Issue/ points of difference Views expressed by the Member (Technical) & relevant para in the interim order Views expressed by the Member (Judicial) & relevant para in the interim order 1. Whether the Deputy Commissioner, Division-9, Service Tax-VII, action in returning the refund claim that has been upheld by the Commissioner (Appeals) is to be upheld by the CESTAT as opined by Member (Technical) or is to be set aside as opined by Member (Judicial) Deputy Commissioner could have either transferred the refund claim to the officer having jurisdiction or could have....
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....fatlal Industries has held that even though the purchaser of goods can file the refund claim, it needs to be filed in the jurisdiction from where the goods were cleared on payment of duty. [Para 4.29, pages 49 and 50] The Supreme Court in Mafatlal Industries had refused to accept the submissions (qua practical difficulty in filing a refund claim by a purchaser at the factory site) to set aside the 1991 Amendment Act since the said arguments were made without a legal provision backing the same. When the statute does not stipulate filing of a refund at the place of removal of the goods by the purchaser, analysis of the same to counter the argument of the Appellant is erroneous (as the same would not act even as obiter dicta under the rule of precedents) [Para 10, page 62] In view of the observation of the Rajasthan High Court in Chambal Fertilisers that it is always better to confine the claim for refund with the jurisdictional commissioner, holds that the Tribunal is not inclined to follow the earlier orders of the Tribunal holding that the service recipient has the option to file refund claim at either jurisdiction. [Para 4.30, page 51] Rajasthan High Court in....
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....he specified services from levy of service tax, for a specified period. Corresponding machinery provisions for filing of refund claim by an applicant and refund of the same to such applicant were also made therein. The relevant statutory provision is extracted herein below:- "103. (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 and ending with the 29th day of February, 2016 (both days inclusive), in respect of services provided by way of construction, erection, commissioning or installation of original works pertaining to an airport or port, under a contract which had been entered into before the 1st day of March, 2015 and on which appropriate stamp duty, where applicable, had been paid before that date, subject to the condition that Ministry of Civil Aviation or, as the case may be, the Ministry of Shipping in the Government of India certifies that the contract had been entered into before the 1st day of March, 2015. (2) Refund shall be made of all such service tax which has been collected but which would not have been so collected had sub-section (1) b....
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.... 1994 (for short, 'the Rules 1994') , read with Rule 3 of Central Excise Rules, 2002. Since, the provisions of Section 11B of the Act of 1944 were discussed for consideration of the refund application filed by the appellant, the salient features of such statutory provision need to be discussed, and accordingly, are discussed in the following sub-paragraphs. 14.2 The provision for claim of refund of Central Excise duty is contained in Section 11B of the Act of 1944. Section 83 of the Act of 1994 mandates that certain provisions of the Act of 1944 shall apply, so far as may be, in relation to service tax, as they may apply in relation to duty of excise. For the purpose of refund of service tax, Section 83 of the Act of 1994 has borrowed the provisions of Section 11B from the Act of 1944. Therefore, for claim of refund of service tax, the provisions of Section 11B ibid shall apply mutatis mutandis. The said statutory provision is quoted herein below: "Section 11B. (1) Any person claiming refund of any duty of excise and interest, if any, paid on such duty may make an application for refund of such duty and interest, if any, paid on such duty to the Assistant Commissioner o....
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....n the 'Manual of Supplementary Instructions' issued by CBEC in 2001 and edited in 2005. The said Manual was issued by CBEC, for maintaining consistency with the provisions of the Act and the Rules, and for better understanding or for the benefit of trade, industry and the Central Excise field formations. In the Preface dated 17.05.2005 to such instructions, the Under Secretary to the Government of India has clarified that 'if the readers find any instruction in the said Manual, which are contrary to the provisions of the Central Excise Act, 1944 and the rules made thereunder, then such Act and Rules shall prevail'. Since, there is no ambiguity in reading of Section 11B ibid, it cannot be said that as per the Supplementary Instructions, the jurisdiction to deal with refund application lies with the authority at the service provider's end alone. 14.5 On bare reading of the provisions of Section 11B of the Act of 1944, it would transpire that the designated authority, before whom the refund application is required to be filed, has only mentioned in the said statute, as the 'Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise'. The provisions of the sai....
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....ist in Section 103 of the Act of 1994, for returning the refund application to the claimant, in my considered view, such action on the part of the original authority, which was subsequently endorsed by the first appellate authority, would not stand the scrutiny of law. 16.2 I find that the original authority, while returning the refund application to the applicants, had stated in his letter dated 08.12.2016 that the service tax, for which the refund application was preferred, had not been paid by the appellants into the account of Service Tax-VII Commissionerate, Mumbai; but the same had been paid by the service provider at Service Tax, Kolkata Commissionerate; and thus, the refund claim cannot be entertained at his end. I find that such interpretation placed by the authority below is not in consonance with the statutory provisions. Rule 6 of the Rules of 1994, deals with the issue of payment of service tax by an assessee. It has been mandated that the service tax shall be paid to the credit of Central Government. In context with the manner and mode of deposit of indirect taxes into the Central Government account, the Principal Chief Controller of Accounts in the CBEC, has prepa....
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....e contents in the said judgements, I find that the Hon'ble High Courts have held that the limitation prescribed under Section 103 of the Act of 1994 cannot be ignored, while considering the refund application filed by the claimant. In the present case, the appellants have indeed filed their refund claim applications within the time prescribed under Section 103 of the Act of 1994 and such fact has not been disputed by the department. Thus, reliance on these judgements is not relevant for consideration of the present dispute. 17.2 In paragraphs 4.8 to 4.10 of the Interim Order, reference has been made by the learned Member (Technical) to the judgement of the Hon'ble Supreme Court, in the case of Canon India Pvt. Ltd. Vs. Commissioner of Customs-2021 (376) E.L.T. 3 (SC), to justify that the phrase 'Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise', used in Section 11B of the Act of 1994 is to be interpreted as the 'proper officer', with whom the ST-3 returns, in respect of which the refund claim has been made, was filed. In this context, he has placed reliance on the said judgment to derive the ratio that the phrase 'Assistant Commissioner of Ce....
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....hich has been collected, but which would have not been so collected, had sub-section (1) been in full force at all times. As mentioned earlier, Section 103 of the Act of 1994 is a complete code in itself and it does not mandate for filing of the refund claim at any specified jurisdiction. Once it is admitted that the recipient of the service is eligible to file refund claim, it is beyond the mandate of the law to insist that such claim should be filed with the proper officer, having jurisdiction over the service provider. Further, Section 103(3) of the Act of 1994 also starts with a non-obstante clause and puts only condition that the refund application should be filed within six months. Thus, there is no other condition imposed, as to the specific officer, before whom the refund claim should be filed with. 17.5 The appellants in the present case have filed their refund claim before their own jurisdictional Service Tax divisional office, where they used to file the service tax returns. Even Section 11B of the Act of 1944, which has been strongly relied upon in the Interim Order, also does not mandate that the claim should be filed before the service provider's jurisdictional....
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....provisions of Section 72 of the Contract Act, 1872 ("1872 Act") or Section 17(1)(c) of the Limitation Act, 1963 ("1963 Act"), based on favourable judgement in someone else's case and file the refund within 3 years of the discovery of mistake. In other words, the Hon'ble Court have held that mandate of limitation provided under Section 11B of the Act of 1944 cannot be ignored. The judgements in the cases of ITC, Flock and Priya Blue (supra) were relied upon by the learned Member (Technical), to emphasize that in order to be eligible for refund, one need to adhere to the provisions of Section 27 of the Customs Act, 1962 strictly. In the present case, interpretation of the provisions of Section 27 (supra) is not in question and there is no dispute that the appellants have filed the refund claim within 6 months of the Presidential assent to Section 103 of the Act of 1994 and as such, is within the schedule time frame. Thus, recourse cannot be had to the provisions of 1872 Act or the 1963 Act. 17.8 Further, in Paragraph 4.22 of the Interim Order, reference has been made by learned Member (Technical) to the judgments of (i) Kerala State Electronics Corporation vs Collector of C....
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....e Interim Order, reference has been made by learned Member (Technical) to compliance aspects contained in Rule 6 of the Rules of 2004.On reading of the said statutory provision, it transpires that the responsibility of such compliance has been fixed on the service provider and not on the receiver of the taxable service, i.e., the appellants herein. Further, Section 103 of the Act of 1994 does not warrant compliance with respect to such rule by the appellants. Assuming that such compliance is warranted, then the jurisdictional officer at the appellant's end ought to have sought for such report of compliance, either from the appellants or from the jurisdictional officer at the service provider's end. Such instances of the jurisdictional officer, seeking compliance from his counterpart in other jurisdictions, are not unknown to the field formation. For example, in the case of movement of goods under Chapter 'X' procedure, in the Central Excise regime, or in the case of variance of credit under assessment, in terms of Rule 57E of the erstwhile Modvat Credit Rules, such compliance was often obtained. Therefore, in the absence of authority to seek such compliance, denial of the benefit o....
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....oint in case of another assessee i.e., the appellants herein. 17.12 In paragraph 4.29 of the Interim Order, Member (Technical) has placed reliance on the judgement of Hon'ble Supreme Court in the case of Mafatlal (supra). On reading of the said judgement, it was observed that the Hon'ble Court in the said case, had dealt with the validity/legality of the 1991 Amendment Act and not considered the issue of jurisdiction of the officer, before whom the refund claim should be filed. It is a settled principle of law, that the judgement is the ratio on what it decides and not what can be deduced from it. It is to be noted from the finding reproduced in paragraph 4.29 of the Interim Order that those are the comments of the Hon'ble Court, while negating the submissions made before them and not the ratio of the judgement on the issue before the Hon'ble Court. 17.13 In the case of Chambal Fertilizers & Chem. Ltd., vs Commr. of C. Ex. & S.T., Udaipur 2017 (52) STR 329 (Tri-Del.), the Tribunal had held that there is no bar in filing refund claim in the jurisdiction of service recipient and this order of the Tribunal has been upheld by the Hon'ble Rajasthan High Court [2018(15) GSTL 65....