TaxTMI 
TaxTMI 
2026 (8) TMI 731
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.... Rigs for use in its petroleum exploration activities. M/s.Aban Offshore Ltd., has charged service tax from M/s.Hardy Exploration & Production (India) Ltd., for supply and operation of floating Rigs under the head "Mining Services" and in turn paid to the department. The payment of service tax to the Department by M/s.Aban Offshore Ltd., is not in dispute. 3. The respondent, from whom the service tax was collected had sought for refund of the tax on the ground that service tax for supply of floating rigs is taxable only with effect from 16.05.2008 under the category of "Supply of Tangible Goods Service." Therefore, the service tax collected erroneously by M/s.Aban and remitted to the Department for the period 01.06.2007 to 15.05.2008 ought to be refunded. 4. The Original Authority rejected the claim on the ground that M/s.Aban Offshore Ltd., which had remitted the service tax under the head "Mining Service," had not raised any classification dispute. Further, the judgment relied by the respondent, rendered by the Bombay High Court in Indian National Ship Owners Association & Others vs. Union of India, is sub judice before the Hon'ble Supreme Court. That apart, the Original Au....
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....aim refund. 9. Regarding the question of limitation, the Tribunal on relying upon the judgment of the Madras High Court rendered in 3E Infotech v. CCE, reported in 2018 (7) TMI 276 and the judgment of the Bombay High Court in Parijat Construction v. CCE, Nashik reported in 2018 (19) G.S.T.L 8 (Bom.), held that the issue whether limitation prescribed under Section 11B of the Central Excise Act, 1944, applies to refund claimed in respect of service tax paid under the mistake of law, is no longer res integra. The limitation prescribed under Section 11B is not applicable to refund claims for service tax paid under mistake of law, as held by the Hon'ble Supreme Court in case of Collector of C.E., Chandigarh v. Doaba Co-operative Sugar Mills. Further, the Tribunal also held that refusal to refund the service tax collected wrongly would go against the mandate of Article 265 of the Constitution of India, which prohibits levy or collection of tax except by authority of law. With the above conclusion, the appeal filed by the Revenue dismissed, thereby confirming the order passed by the Appellate Authority in favour of the assessee/respondent. 10. Being aggrieved, the Revenue has prefer....
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....oubt that in a case where an adjudicating authority has passed an order which is appealable under the statute and the party aggrieved did not choose to exercise the statutory right of filing an appeal, it is not open to the party to question the correctness of the order of the adjudicating authority subsequently by filing a claim for refund on the ground that the adjudicating authority had committed an error in passing 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 taken by us also gains support from the provision in sub-rule (3) of Rule 11 wherein it is laid down that where as 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 i....
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....hallans, which are purported for payment of Service Tax only and as such, the claim of the respondent that the payment was only deposit and not Service Tax, cannot be sustained. Further, a tax, be it, direct or indirect, is intended for immediate expenditure for the common good of the state and it would be unjust to require its repayment after it has been in whole or in part expended, which would often be the case in most payment of such sort. Therefore, it is impracticable for the authorities to refund applications that are filed beyond time even it is paid under a mistake of law. Therefore, the authorities have rightly rejected the claim of the respondent and this aspect has not been taken note of by the learned single Judge." 15. For denying refund, yet another judgment of the Hon'ble Supreme Court in Western Coalfields Ltd vs. Commissioner of Central Excise, Trichy, reported in 2019 (365) ELT 849 (S.C.), is relied by the Learned Standing Counsel for the appellant. The claim of refund of duty under Section 11B of Central Excise Act, 1944, in respect of duty paid under protest by the manufacturer and the refund claim made by the buyer after six months prescribed period been co....
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.... Section 11-B(3) stated that no refund shall be made except in terms of Section 11-B(2). Section 11-B(2)(e) conferred a right on the buyer to claim refund in cases where he proved that he had not passed on the duty to any other person. The entire scheme of Section 11-B showed the difference between the rights of a manufacturer to claim refund and the right of the buyer to claim refund as separate and distinct. Moreover, under Section 4 of the said Act, every payment by the manufacturer whether under protest or under provisional assessment was on his own account. The accounts of the manufacturer are different from the accounts of a buyer (distributor). Consequently, there is no merit in the argument advanced on behalf of the respondent that the distributor was entitled to claim refund of "on-account" payment made under protest by the manufacturer without complying with Section 11-B of the Act." It was further held as under: [Allied Photographics (India) Ltd. Case [CCE v. Allied Photographics (India) Ltd., (2004) 4 SCC 34], SCC p. 53, para 16]. "16. Having come to the conclusion that the respondent was bound to comply with Section 11-B of the Act and having come to ....
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....on 17 to pass a reasoned/speaking order in the situation in case on verification, self-assessment is not found to be satisfactory, an order of reassessment has to be passed under Section 17(4). Section 128 has not provided for an appeal against a speaking order but against "any order" which is of wide amplitude. The reasoning employed by the High Court is that since there is no lis, no speaking order is passed, as such an appeal would not lie, is not sustainable in law, is contrary to what has been held by this Court in Escorts [Escorts Ltd. v. Union of India, 1994 Supp (3) SCC 86]. 44. The provisions under Section 27 cannot be invoked in the absence of amendment or modification having been made in the bill of entry on the basis of which self-assessment has been made. In other words, the order of self-assessment is required to be followed unless modified before the claim for refund is entertained under Section 27. The refund proceedings are in the nature of execution for refunding amount. It is not assessment or reassessment proceedings at all. Apart from that, there are other conditions which are to be satisfied for claiming exemption, as provided in the exemption notific....
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....) 5 SCC 536. Article 265 of the Constitution of India reads as below:- "265. Taxes not to be imposed save by authority of law: No tax shall be levied or collected except by authority of law." In Mafatlal Industries vs. Union of India., the claim of refund been classified under three broad categories, namely; (i) Unconstitutional levy, (ii) Illegal Levy, and (iii) Mistake of law. and the Hon'ble Supreme Court has said:- "Rule 11/Section 11B are premised upon the supposition that the provisions of the Act are good and valid. But where any provisions under which duty is levied is found to be unconstitutional, Article 265 steps in. In other words, the person who had paid the tax is entitled to claim refund and such claim cannot be governed by the provisions in Rule l1/Section 11B. The very collection and/or retention of tax without the authority of law entitles the person, from whom it is collected, to claim its refund. A corresponding obligation upon the state to refund it can also be said to flow from it. This can be called the right to refund arising under and by virtue of the constitutional provisions viz., Article 265." ....
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....nment by M/s.Aban Offshore Ltd., by passing on the tax liability on the respondent, cannot be withheld by the Government either citing limitation or on technical grounds. Hence, we conclude that the creation of new entry for "Supply of tangible goods service and the conclusive finding of the Hon'ble Supreme Court in the matter of Indian National Shipowners Association., lead to the irresistible conclusion that the Tribunal was right in holding that the respondent, as service recipients, eligible for refund of service tax paid erroneously under the classification of "Mining Service." Therefore, the first substantial question of law is answered in the affirmative, favour of the respondent. (ii) Whether the Tribunal is justified in overlooking that per Sec.83 of the Finance Act, 1994 read with Explanation (B)(e) to Sec.11 B of the Central Excise Act, 1994, the purchaser ought to have filed the claim for refund within 1 year from the date of receipt of service and therefore the assessing officer had rightly rejected the claim for the period prior to 05/05/2008 as barred by limitation? Section 83 of the Finance Act, 1994, read with Explanation (B)(e) to Section 11B of Cen....
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....authorities that the service tax collected by M/s.Aban Offshore Ltd., had been passed on to the respondent-assessee does not warrant interference. Therefore, the refund of the tax to the respondent would not amount to unjust enrichment. Contrarily, if the Department retains the money which was paid by mistake of law and received by the Government without constitutional validity, will not only tantamount to unjust enrichment by the Government but also unconstitutional. Therefore, the third question of law is answered in favour of the assessee. (iv) Whether the Tribunal is right in simply relying on the certificate issued by CPCL and the invoices issued by respondents to CPCL to conclude that the respondent had demonstrated that it had not passed on the burden of service tax and unjust enrichment is not applicable in the present case? The certificate issued by M/s.CPCL not challenged before the Appellate Authority or the Tribunal. The validity of these certificates are questions of fact. In such circumstances, the Department cannot raise suspicion over the certificate given by the CPCL regarding the passing of service tax on the assessee. Hence, the fourth substantial que....