TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 333
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....ere issued to the assessee. The Adjudicating Authority vide the Order-in-Original dated 29.05.2020 dropped all the proceedings initiated vide the SCNs and the refund claims of the assessee were allowed. Subsequently, the Order-in-Original was reviewed and vide the Review Order dated 25.08.2020, passed by the Commissioner, CGST & Central Excise, Kanpur, the Department filed appeal before the first Appellate Authority on the following grounds:- (i) The adjudication authority in the impugned order had relied and found force in the respondent's plea that tax paid by them was never due and only paid due to mistake and such excess amount it to be paid back to its owner and also relied upon the various judgements. (ii) Section 11B of Central Excise Act, 1944 already described the relevant date in their explanation. Subclause (f) of clause (B) of the explanation of Section 11B clearly says that date of payment of duty is relevant date for calculation period of one year. (iii) In this case, the refund application filed by the claimant on 06.08.2019 and 22.11.2019 and tax was deposited on or before the issuance of Board Circular dated 22.08.2016 and therefore, time....
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....o.25/2012-ST dated 20.06.2012 and tax payer paid the amount mistakenly. 4. Internal /Departmental Audit date Internal/Departmental Audit by Service Tax Department on in financial year 2019. 5. 10.07.2019 Refund Claim date and relevant date for filling refund application Amount Date of filing of Refund Claim 1- 24,44,166.00 06.08.2019 2- 6,23,749.00 06.08.2019 3- 17,16,765.00 06.08.2019 4- 1,52,243.00 22.10.2019 *In case of refund claim where the Payment of duty made under mistake of law in that instance time limitation prescribed under Section 11B of Central Excise Act would not maintainable. 6. 18.10.2019 & 13.12.2019 Show Cause Notice date Show Cause Notice issued by Assistant Commissioner CGST division III Kanpur. "Refund claim rejected on the ground of time limitation prescribed under Section 11B of Central Excise Act." 7. 29.05.2020 Order-in-Original date (OIO) Order-in-Original No.07/ST/REF/ACKIII/2020 issued by Assistant Commissioner CGST Division III Kanpur. "All the proceedings initiated by both show cause notice d....
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....inal dated 29.05.2020 have passed a detailed and well reasoned order covering all the aspects. The discussion and findings of the Adjudicating Authority are reproduced for ready reference:- "Discussion and Findings I have carefully gone through the facts of the case, refund claim submitted by the party along with documents, submissions made by the party during personal hearing held on 11.02.2020 and relevant notifications, rules, circulars etc. and observed that the show cause notices issued to the party mainly on the grounds that under section 11 B (ea) which define relevant date of filing refund in case of goods which are exempt from payment of duty by a special order issued under Sub-Section (2) of Section 5A of the Act, the date of issue of such order. The relevant period is to be calculated from the issue of Board Circular No.199/09/2016-ST dated 22.08.2016 as explaining clarification in the Serial No.12 (e) and Serial No.25(a) of Notification No.25/2012-ST dated 20.06.2012. Thus the period of one year in the instant case is expired as the party has filed refund claims amounting to Rs.47,84,671/- on 06.08.2019 and later for Rs.1,52,243/- on 22.11.2019 stating....
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....y and interest and their claim is nothing to do with the provisions of Section 11 B of the Act, ibid, as the tax, paid by us had never been due and only been paid due to lack of knowledge and mistake and such amount is to be paid back to the owner which is unduly retained at the end of the Government with no relevancy with the tax applicable as per any of the provision on such services during relevant period. The money deposited in such accounts belongs to them and does not become property of Government and they can be entitled refund at any time. Neither the law of limitation nor theory of unjust enrichment is applicable to such deposit. They also cited some case laws in support of their contention as following- i) Jay Shree Tea and Industries Vs. CCE[2005(190) ELT 106 (CESTAT SMB)]. ii) Navdeep Packaging Industries Vs. CCE[2007(210)ELT 417 (CESTAT)]. iii) M/s 3E Infotech Vs. Customs (Madras High Court). iv) UOI Vs. ITC Ltd. reported in (1993) Supp IV SCC 326. v) Hon'ble High Court Gujarat in the case of M/s Oil and Natural Gas Corporation Ltd. Vs. UOI report in 2017 (354) ELT 577 (Guj). vi) Hon'ble High Court ....
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....thority or a Governmental authority by way of carrying out any activity in relation to any function ordinarily entrusted to a municipality in relation to water supply, public health, Sanitation, conservancy, solid waste management or slum improvement and upgradation." 2.2.2 In the period 11-07-2014 onwards "Services provided to Government, a local authority or a Governmental authority by way of water supply, public health, sanitation conservancy, solid waste management or slum improvement and upgradation." 3. Thus, it follows that, among others, exemption is available to the following services provided to the Government, a local authority or a Governmental authority, by way of- (a) Construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation or alteration of pipeline, conduit or plant for (i) water supply (ii) water treatment and (b) water supply 4------------------------------- 5. Thus the exemption under the entries at serial No.12 (e) and 25(a) of Notification No.25/2012Service Tax dated 20.06.2012, will cover a wide range of activit....
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.... 2013-14 and 2014-15 the period for which refund claim of service tax, which was paid by them by mistake and this tax was not leviable on such cleaning service' during the relevant period. Regarding party argument that Section 11B of the Central Excise Act, 1994 also made applicable to Service Tax matters by virtue of Section 83 of the Finance Act, 1994 only relates to refund of applicable duty and interest, if any, paid on such duty and their claims has nothing to do with the provisions of Section 11B of Central Excise Act, 1944 as the tax paid by them was never due and only paid due to mistake and such excess amount it to be paid back to its owner which is unduly retained at the Government with no relevancy with the tax applicable as per any of the provisions on such services during relevant period. The party also cited few case laws in support of their contention, which are the following- i) Jay Shree Tea and Industries Vs. CCE[2005(190) ELT 106 (CESTAT SMB)]. ii) Navdeep Packaging Industries Vs. CCE[2007(210)ELT 417 (CESTAT)]. iii) M/s 3E Infotech Vs. Customs (Madras High Court). iv) UOI Vs. ITC Ltd. reported in (1993) Supp IV SCC 326. ....
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....ve not submitted any evidence that they have not passed incidence of tax to any other person, in other words unjust enrichment In the strength of challans I find that party have deposited the service tax on its own without charging from Cantonment Board and they paid on its own into Government exchequer From the Trail balance of the party for the relevant period if is also clear that this amount shown under expenditure head for paying service tax to the Government. As the amount of refund is above Rs. Five Lacs, this office sent the said refund claim to the AC (Audit), CGST, Kanpur vide this office letter of even C. No.1045 dated 26.05.2020 for pre audit verification. The AC (Audit), CGST, Kanpur has submitted the pre audit clearance report of the refund claim vide their office letter C. No. V(1)630/Pre-Audit/J. D. Associates/2020/841 dated 29.05.2020. In the light of above discussion and findings I hereby pass the following order:- ORDER I hereby drop all the proceedings initiated by Show Cause Notices issued under C.No. V(30)Tech/137/Ref/J D Associates/DIII/19/3077 dated 22.10.2019 and V(30)Tech/137/Ref/J D Associates/D-III/19/3687 dated 16.12.....
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....ection 11B is applicable to the facts of the case as finding thereon would have bearing for considering the issue of maintainability of Writ Petition. Section 11B of the Central Excise Act reads as under : "11B.Claimsforrefundofduty: (1) Any person claiming refund of any duty of excise may make an application for refund of such duty to the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise before the expiry of one year from the relevant date in such form and manner as may be prescribed and the application shall be accompanied by such documentary or other evidence (including the document referred to in Section 12A) as the applicant may furnish to establish that the amount of duty of excise in relation to which such refund is claimed was collected from, or paid by, him and the incidence of such duty had not been passed on by him to any other person." 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 wh....
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....hority 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 initially not payable by them. Therefore, mere nomenclature will not be an embargo on the right of the petitioner to demand refund of payment made by them under mistaken notion...." 12. The said principle was followed by this Tribunal in the following judgments: - i. M/s ASL Builders Private Limited vs. Commissioner of Central GST & CX, Jamshedpur [2020 (1) TMI 431 - CESTAT Kolkata] "13. The aforesaid propositions reveal that what one has to see is whether the amount paid by the assessee under a mistaken notion was payable or not. In other words, if the assessee had not paid those 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 colle....
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....lls (supra) relied upon by the Appellate Tribunal has in applying Section 11B, limitation made an exception in case of refund claims where the payment of duty was under a mistake of law. We are of the view that the impugned order is erroneous in that it applies the limitation prescribed under Section 11B of the Act to the present case were admittedly appellant had paid a Service Tax on Commercial or Industrial Construction Service even though such service is not leviable to service tax. We are of the view that the decisions relied upon by the Appellate Tribunal do not support the case of the respondent in rejecting the refund claim on the ground that it was barred by limitation. 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) G....
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....9 (Cal.)] "17. Now I will consider the point of limitation. A person to whom money has been paid by mistake by another person, becomes at common law a trustee for that other person with an obligation to repay the sum received. This is the equitable principle on which Section 72 of the Contract Act, 1872 has been enacted. Therefore, the person who is entitled to the money is the beneficiary or cesti qui trust. When the said sum of Rs. 360.46 lakhs was paid by mistake by the petitioner to the Government of India, the latter instantly became a trustee to repay that amount to the petitioner. The obligation was a continuing obligation. When a wrong is continuing there is no limitation 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....