AI Drafter 
TaxTMI 
TaxTMI 
2025 (11) TMI 1340
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....use. Since the above said activities are excluded from the activities of commercial or industrial construction services, Appellant has not paid service tax. However, during audit in the month of February, 2008, the audit party insisted that the Appellant is liable to pay service tax since it was not in relation to Dams and construction of powerhouses undertaken by Appellant is not part of Dams. Thus, as directed, Appellant paid service tax with interest amounting to Rs. 48,26,036/- during the period from February and March, 2008. Thereafter claiming that the said amount is not payable by them under service tax, Appellant filed a refund claim on 04.11.2009. On said refund application, a show cause notice dated 02.02.2010 was issued and thereafter Adjudication authority as per the Order dated 28.10.2010 rejected the refund claim. Aggrieved by the said order, an appeal was filed before the Commissioner (Appeals) and Commissioner (Appeals) as per the impugned order, upheld the finding of the Adjudication authority. Aggrieved by the said order, present appeal is filed. 3. When the appeal came up for hearing, the Learned Counsel for the Appellant drew our attention to the definition o....
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....tion of work executed by the assessee in the Maneri Bhali Hydro-Electric Project, we note that it is in connection with construction of barage, intake sedimentation chamber, etc. There is no doubt that such work has been carried out as part of the hydroelectric project and construction of dam therefor. So, we find no infirmity in the view taken by the adjudicating authority that these activities are in connection with the construction of the dam and hence excluded from the purview of Commercial or Industrial Construction" "6. With reference to the work executed by the assessee for Himachal Pradesh Electricity Board, such work involves construction of highway tunnel which is extension of existing highway tunnel. Construction of tunnel is specifically excluded from the purview of "Commercial and Industrial Construction and we uphold the finding of the adjudicating authority in this regard to the effect that no Service Tax is liable for such construction activities. In view of above Revenue's appeal is dismissed". 5. The issue was also considered by the Tribunal in the matter of Commissioner of Service Tax, Delhi Vs. M/s C P Systems Pvt. Ltd. - (2023 (71) GSTL 70 (Tri.....
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....n fact without these fixtures the dam or the tunnel system is not complete. Hence such works are also in the nature of dam/tunnel fall outside the scope of 'works contract service' as well under 'commercial or industrial construction service' by way of the specific exclusion provided for dams under the Act. The SCN has tried to differentiate between a HEP and dam and tunnel. The discussions above would clearly show that Dam and Tunnel are integral part of HEP, and HEP cannot be visualised in isolation from Dam and Tunnels. The logic of SCN would lead to an absurd situation where construction services of dam and tunnel under separate contracts would not attract service tax, while the same activity in the form of an integrated contract of HEP would attract service tax. 54. Therefore, the demand of Service Tax to the extent it relates to hydroelectric projects cannot sustain in respect of all works executed before 16-2007 under the taxable head of CICS and in respect of work executed after 1-6-2007 under the taxable head of work contract services, inasmuch as the same are outside the purview of service tax in view of discussion above and accordingly merits to ....
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....he dams are for multipurpose like, irrigation, power generation, flood control, etc. The exclusion clause did not put any condition that the dams for particular purpose only will be excluded from tax liability. We find no justification to give a restrictive meaning to the term "dam" to the effect that the exemption will be available only when it is not part of any bigger project. 5. We find that the impugned order is not legally sustainable. Accordingly, the same is set aside and the appeal is allowed". 7. The Learned Counsel further submits that the issue was also considered by Larger Bench in the matter of M/s. Lanco Infratech Ltd. Vs. CC, CE & ST Hyderabad - (2015 (38) STR 709 (Tri. - LB) where it is held that:- "21. (b) Construction of canals for irrigation or water supply; construction or laying of pipelines/conduits for lift irrigation conceived and integrated into a dam project, must be classified as works contract "in respect of dam" and is thus excluded from the scope of "Works Contract Service" defined in Section 65(105)(zzzza) the Act, in view of the exclusionary clause in the provision;" 8. As regarding rejection of the refund application on the ....
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....n the appeal filed by Revenue. In the grounds of appeal Revenue has referred to para 13.4 of the Board's Circular No. 80/10/2004 ST, dated 17-9-2004 in which certain clarifications were given in connection with the exclusion clause within the Commercial and Industrial Construction (CIC). Revenue is of the view that such exclusion under CIC is available only to dams and tunnels independently and not applicable when they are constructed as part of a hydroelectric project. From the description of work executed by the assessee in the Maneri Bhali Hydro-Electric Project, we note that it is in connection with construction of barage, intake sedimentation chamber, etc. There is no doubt that such work has been carried out as part of the hydroelectric project and construction of dam therefor. So, we find no infirmity in the view taken by the adjudicating authority that these activities are in connection with the construction of the dam and hence excluded from the purview of Commercial or Industrial Construction". 10.1. We also find that, the reliance placed by the Commissioner on the decision of the Tribunal in the case of Ramky Infrastructure Ltd. Vs. Commissioner 2013 (29) STR....
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....he appellant that it was after the judgment in the case of Loong Soong Tea Estate the cause of action arose. That judgment was passed in July 1973. It appears thus that the High Court was in error in coming to the conclusion that it was possible for the appellant to know about the legality of the tax sought to be imposed as early as 1963, when the Act in question was declared ultra vires as mentioned hereinbefore. Thereafter the taxes were paid in 1968. Therefore, the claim in November, 1973 was belated. We are unable to agree with this conclusion. As mentioned hereinbefore the question that arises in this case is whether the Court should direct refund of the amount in question. Courts have made a distinction between those cases where a claimant approaches a High Court seeking relief of obtaining refund only and those where refund is sought as a consequential relief after striking down of the order of assessment etc. Normally speaking in a society governed by rule of law taxes should be paid by citizens as soon as they are due in accordance with law. Equally, Page 8 of 11 ST/20581/2022 as a corollary of the said statement of law it follows that taxes collected without the authority....
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....oncerned, it is obvious that the provisions of the Act cannot bar and curtail these remedies. It is, however, equally obvious that while exercising the power under Article 226/Article 32, the Court would certainly take note of the legislative intent manifested in the provisions of the Act and would exercise their jurisdiction consistent with the provisions of the enactment. ........... 99. The said enactments including Section 11B of Central Excises and Salt Act and Section 27 of the Customs Act do constitute "law" within the meaning of Article 265 of the Constitution of India and hence, any tax collected, retained or not refunded in accordance with the said provisions must be held to be collected, retained or not refunded, as the case may be, under the authority of law. Both the enactments are self contained enactments providing for levy, assessment, recovery and refund of duties, imposed 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 ca....
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....e the duty was paid on account of mis construction, 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 along with Section 17(1)(c) of the Page 13 of 23 C/2386/2012 Limitation Act, 1963, the period of limitation for making such a claim for refund, whether by way of a suit or by way of a writ petition, is three years from the date of discovery of such mistake of law? Kanhaiyalal is understood as saying that such a course is permissible. Later decisions commencing from Bhailal Bhai have held that the period of limitation in such cases is three years from the date of discovery of the mistake of law. With the greatest respect to the learned Judges who said so, we find ourselves unable to agree with the said propos....
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....isions - 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 both the situations represented by Sections 11A and 11B. As held by a seven - Judge Bench in Kamala Mills, following the principles enunciated in Firm & Illuri Subbaiya Chetty, the words "any assessment made under this Act" are wide enough to cover all assessments made by the appropriate authorities under the Act whether the assessments are correct or not and that the words "an assessment made" cannot mean an assessment properly and correctly made. It was also pointed out in the said decision that the provisions of the Bombay Sales Tax Act clearly indica....
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....wever, 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 Page 16 of 23 C/2386/2012 and other decisions following it. Every decision of this Court and of the High Courts on a question of law in favour 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 been meant to provide for this. We are, therefore, of the clear and considered opinion that the theory of mistake of law and the consequent period of limitation of three years from the date of discovery of such mistake of law cannot be invoked by an assessee taking advantage of the decision in another assessee's case. All claims for refund ought to be, and ought to have been, filed only under and in accordance with Rule 11/Section 11B and under no other provision and in no other forum. An assessee must succe....