AI Drafter 
TaxTMI 
TaxTMI 
2025 (4) TMI 882
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....t, 2001. Section 91 read with Section 93 of the Finance Act, 2004 and Section 136 read with 138 of the Finance Act, 2007 provided for levy of Education Cess (EC) and Secondary & Higher Education Cess (SHEC) on all excisable goods specified in the 1st Schedule to the Central Excise Tariff Act, 1985. 2.2 The Appellant was also required to pay Oil Industries Development (OID) Cess which levied under Section 15(1) of the Oil Industry (Development) Act, 1974 on the crude oil produced by the Appellant. 2.3 The Appellant was of the view that OID Cess is a duty of excise and that EC and SHEC is required to be paid on such Cess, thus, the Appellant paid EC w.e.f. 09-07-2004 and SHEC w.e.f. 01-03-2007 on OID Cess. Based on circular bearing M.F.(D.R.) Letter F.No. 345/2/2004-TRU (Pt.) dated 10.08.2004, it was the Appellant"s understanding that EC and SHEC should be paid on OID Cess. 2.4 Thereafter, Circular No. 978/2/2014-CX dated 07-01-2014 was issued by the CBIC clarifying that EC and SHEC can be levied only on those duties of excise which are both levied and collected by the department of Revenue. A cess levied under an Act which is not administered by the Ministry of Finance (Dep....
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.... 2.11 Accordingly, refund was allowed to the Appellant for the period which was within the period of limitation (January 2013 to December 2013) only and the balance claim was rejected as time barred. 2.12 Being aggrieved by the Order-in-Appeal, the appellant has preferred the present appeal before us. 3. The ld.Counsel for the appellant submits that the instant dispute before this Tribunal relates to the period July 2004 to December 2012 for an amount of Rs.72,49,62,142/- and the only question to be decided is whether the instant claim of refund is hit by limitation period under Section 11B of the Central Excise Act, 1944 when EC and SHEC has been paid by the Appellant under mistaken interpretation of law. He submits that the issue is no longer res-integra and the limitation period prescribed under Section 11B of the Central Excise Act, 1944, is not applicable to the instant facts of this case. 3.1 He submitted that the exact same issue arising in the instant case i.e., whether the claim of refund of EC and SHEC paid on OID Cess based on Circular No.978/2/2014-CX dated 07-01-2014 is hit by limitation period under Section 11B of the Central Excise Act, 1944, has already ....
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....t Section 11B will not be applicable to the facts and circumstances of the instant case and the entire refund amount claimed should be sanctioned to the petitioner. 3.9 Further, reliance is placed on the following judgements of the High Courts across various jurisdictions wherein it has been held that for refund of tax/duty paid mistakenly, when the levy itself is not applicable, the time limit under Section 11B of Central Excise Act, 1944 will not apply and such amount will not partake the character of duty/tax : (i) Commr. of C. Ex. (Appeals), Bangalore vs. KVR Construction, 2012 (26) STR 195 (Kar), SLP dismissed reported at 2018 (14) GSTL J70 (SC) (ii) Way2wealth Brokers Pvt.Ltd vs. Comm. of C.T., Bengaluru, 2022 (61) GSTL 349 (Kar) (iii) Hind Agro Industries Limited vs. Commissioner of Customs, 2008 (221) ELT 336 (Del), (iv) Alar Infrastructures Pvt. Ltd vs. Commissioner of. C. Ex., Delhi-I, 2015 (40) STR 1066 (Del), (v) National Institute of Public Finance and Policy vs. Commissioner of Service Tax, 2019 (20) GSTL 330 (Del), and (vi) Commissioner of Central Excise and Service Tax v. Oriental Insurance Company Limited, 20....
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....R. for the Revenue relied on the decision of this Tribunal in the Appellant"s own case vide Final Order No.40696/2024 dated 20.06.2024, wherein this Tribunal held that the claim filed under 11B of the Central Excise Act, 1944, is barred by limitation. 5. Heard both the parties and considered the submissions. 6. We find that the facts, which are not in dispute, are that the appellant had paid entire NCCD in terms of Section 136 read with 7th Schedule of the Finance Act, 2001 and Section 91 read with Section 93 of the Finance Act, 2004 and Section 136 read with 138 of the Finance Act, 2007 provided for levy of Education Cess (EC) and Secondary & Higher Education Cess (SHEC) on all excisable goods specified in the 1st Schedule to the Central Excise Tariff Act, 1985. The appellant was also required to pay Oil Industries Development (OID) Cess, which are levied under Section 15 (1) of the Oil Industry (Development) Act, 1974 on the crude oil produced by the appellant. The appellant paid EC w.e.f. 09.07.2004 and SHEC w.e.f. 01.03.2007 on OID Cess. Based on the Circular dated 10.08.2004 and as per the appellant"s understanding, the EC and SHEC should be paid on OID Cess. Thereafter,....
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....Court and the judgment of the Karnataka High Court was followed by the jurisdictional Telengana High Court. 35. In any view of the matter, the view expressed by the Jurisdictional High Court would be binding and in the present case the Telengana High Court in Vasudha Bommireddy has clearly held that when refund is claimed of any amount deposited under a mistake of law, the limitation provided in section 11B of the Excise Act would not be attracted. 36. The legal position that the view expressed by the jurisdictional High Court would prevail over the view of other High Courts has been clearly laid down by a Lager Bench of the Tribunal consisting of five Hon'ble Members in Collector of Central Excise Chandigarh vs. Kashmir Conductors and the observations are: "10. The question as to how the Tribunal should proceed in the face of conflicting decisions of High Courts has been considered in M/s. Atma Steels P. Ltd. and others v. Collector of Central Excise, Chandigarh reported in 1984 (17) E.L.T. 331 wherein the Larger Bench consisting of five Members held that, in view of its All India jurisdiction and peculiar features, the Tribunal cannot be held bound ....
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....ed interpretation or proposition of law, the Tribunal is bound to follow that order since it is not at liberty to disregard the solitary High Court decision." 37. It would be seen from the aforesaid decision of the Larger Bench of the Tribunal that when a jurisdictional High Court has expressed any view in regard to the issue, then that view has to be followed. 38. The inevitable conclusion that follows from the aforesaid discussion is that the limitation contemplated under section 118 of the Excise Act would not be attracted in a case where any amount, even though it is not payable as service tax, is paid under a mistaken notion." 11. The said order of this Tribunal was affirmed by the Hon'ble Telangana High Court, wherein the Hon'ble High Court has observed as under : "9. We have heard the matter at length. It is seen that the single question raised by Mr.Dominic Fernandes, leamed counsel is no more res integra. In the manner proposed question is framed, it is not in dispute that service lax was not payable by the assessee. This question came up for consideration before the Delhi High Court in Hind Agro Industries Limited v. Commissioner of Customs 2....
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.... appellant of service tax paid, which was not payable by the appellant is hit by the provisions of Section 11B of the Central Excise Act, 1944, or not? 8. Now the issue arises that as the appellant has paid the service tax under mistake of law whether they are under the provisions of Section 11B of the Act, applicable or not ? 9. The ld.A.R. for the Revenue relied on the decision of the Madhya Pradesh High Court in the case of MDP Infra (India) Private Limited (supra), wherein the facts of the case are as under : "4. The appellant holds service tax registration and paying service tax under the category of "Works Contract Services". During the period 1-3-2015 to 30-9-2015 the appellant had paid Rs. 25,49,317/- towards Service Tax and interest of Rs. 57,716/- on the following work contracts :- "(i) Construction of EWS houses for Special Area Development Authority (A Government Authority) vide work order No. 02/SADA/2014-15, Agreement No. 04, dated 22-12-2014. (ii) Construction of LIG houses (Affordable Housing) for Indore Development Authority vide Four/Accounts/12-13/70006, dated 19-11-2012, Agreement No. 82/2012-13/IDA. (iii) Co....
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.... a local authority or a Governmental authority, by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation or alteration of - (a) a civil structure or any other original works meant predominantly for use other than for commerce, industry or any other business or profession; (b) a structure meant predominantly for use as - (i) an educational establishment; (ii) a clinical establishment; or (iii) an art or cultural establishment; (c) a residential complex predominantly meant for self-use or for the use of their employees or other persons specified in Explanation 1 to clause (44) of section 65B of the said Act, under a contract entered into before the 1st day of March, 2015 and on which appropriate stamp duty, where applicable, had been paid before that date." (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 ....
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....(supra), wherein the Hon'ble High Court has observed as under : "12. The judgement of this Court in Vasudha Bommireddy V. Assistant Commissioner of S.T.. Hyderabad 2020 (35) G.S.T.L. 52 ( Telangana) was relied upon by other side by contending that the judgment of Karnataka High Court in KVR Construction (supra 3) was considered and this Court also held that when a tax is paid as a mistake of law, the embargo of limitation will not come in the way of claim of refund." 12. Following the decision of the Hon'ble Telangana High Court in the case of Credible Engineering (supra), we hold that the refund claims filed by the appellant, are not hit by the provisions of Section 11B of the Central Excise Act, 1944 as the service tax has been paid by the appellant under mistake of law. Therefore, the Issue No.(b) is also answered in favour of the appellant." 13. The said decision of this Tribunal has been affirmed by the Hon'ble Calcutta High Court as reported in 2025-TIOL-88-HC-KOL-ST, wherein the Hon'ble Calcutta High Court in Civil Appeal Nos.CEXA/56/2024 (IA NO.GA/1/2024) & CEXA/57/2024 (IA NO.GA/1/2024), has observed as under : "17. Thus, we are in full agreem....
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....the case of M/s Credible Engineering Construction Projects Limited (supra), the Hon'ble Third Member Bench, held that the view expressed by the jurisdictional High Court would be binding on this Tribunal and the Hon'ble High Court has clearly held that when the refund claim of any amount deposited under mistake of law, the limitation provided in Section 11B of the Central Excise Act, 1944, would not be attracted. 16. We further take note of the fact that the limitation period to claim refund shall start from the date of noticing of the mistake based on Circular No.978/2/2014-CX dated 07.01.2014 as held by the Hon'ble Gujarat High Court in the case of M/s Aculife Health Care Private Limited and Another Vs. Union of India reported in 2025-VIL-87-GUJ, wherein the Hon'ble Gujarat High Court has observed as under : ""4.2 During July, 2017 to July, 2022, the Petitioner-Company has deposited a total sum of Rs.45,14,300/- as tax on notice pay recovery, in lieu of various employees who left the employment. This amount of tax has been deposited by the Petitioner from its own pockets and the GST on the amount of notice pay recovery was deposited by the Petitioner as and when such ....
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....e. Therefore, the period of two years, for filing a claim, within the meaning of Section 54 of the CGST Act has to be computed from the date of the Circular i.e. from 03.08.2022. In that view of the matter, the refund claims dated 05.11.2022 and 07.11.2022, for whatever period of tax deposited, cannot be said to be time barred. In other words, the calculation of period of two years will not be from September, 2018 as wrongly held by the authorities below, but from 03.08.2022, i.e the date from which the petitioners were informed by the Government through the aforesaid Circular, that the petitioners need not pay tax on the transaction in question, which was clarified not to be a "Service" under the CGST Act.................................................... 10. To sum up, just as citizens have to diligently pay tax which are legally due to the State, equally, as a corollary of the aforesaid statement, the State is not entitled to unjustly enrich itself with amounts collected from citizens which are not sanctioned as "Tax" within the meaning of Article 265 of the Constitution of India." 17. We further take note of the fact that the appellant"s own case as reported in 201....
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....med thereunder have been incorporated in the OID Act, the second condition precedent is satisfied, viz. that the cess is collected by the Central Government in the Ministry of Finance (Department of Revenue); however, the first condition with regard to levy of such duty of excise by the Central Government in the Ministry of Finance (Department of Revenue) is not satisfied inasmuch as the Oil Cess under the OID Act is levied by the Ministry of Petroleum and Natural Gas. In the aforesaid premises, the requirements of Section 93 of the Finance Act, 2004 and Section 138 of the Finance Act, 2007 are not satisfied in the present case, and consequently, the said provisions have no applicability to the facts of the present case. The petitioner, therefore, cannot be said to have been liable to pay Education Cess and Secondary and Higher Secondary Education Cess under the above provisions. * In the facts of the present case, the refund is claimed on the ground that the amount was paid under a mistake of law and such claim being outside the purview of the enactment, can be made either by way of a suit or by way of a writ petition. The petitioner was, therefore, justified in filing th....
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....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. The authority concerned is also duty bound to refund such amount as retention of such amount would be hit by Article 265 of the Constitution of India which mandates that no tax shall be levied or collected except by authority of law. Since the Education Cess and Secondary and Higher Secondary Education Cess collected from the petitioner is not backed by any authority of law, in view of the provisions of Article 265 of the Constitution, the respondents have no authority to retain the same. * If the adjudicating authority was not satisfied with the Chartered Accountants certificate and the other material produced by the petitioner, he could have called upon the petitioner to produce further documentary evidence in support of its claim that it had not passed on the incidence of duty to the purchaser. However, without affording a reasonable opportunity to the petitioner to produce documentary evidence in support of its claim that there was no unjust enrichment, the adjudicating authority was not justified in holdin....