TaxTMI 
TaxTMI 
2026 (10) TMI 249
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.... The Appellant is also registered under Service Tax having registration no. AADCS9080JST003 for payment of Service Tax under reverse charge in respect of services received under 'Goods Transport Agency Service' and 'Manpower Recruitment Agency Service'. 4. The Appellant paid the Service Tax on GTA Service received by them under mistake of law in as much as the transporter in almost all the cases was not covered under the GTA service since no consignment note was being issued by him. As such no Service Tax was payable ab-initio by the Appellant, service being non-taxable. This part has already been decided in favour of the Appellant vide the impugned order and is not the subject matter of this appeal. 5. The Appellants were also exempt from payment of Service Tax on GTA service by virtue of clause (21) (d) of Notification No.25/2012-ST dated 20.06.2012 as amended by Notification No.03/2013-ST dated 01.03.2013 which exempts food stuff (which includes yeast) from payment of Service Tax on GTA. 6. However, Ld. Commissioner (Appeals) rejected the refund of Rs.36,92,166/- to the Appellants. While rejecting the refund he has observed and held in Page 8 of the impugned order as un....
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....se Act, 1944 are not applicable in the instant case. 10. It was also pointed out that the Ld. Commissioner (Appeals) in the impugned order has also not disputed that the Appellants were eligible to avail the benefit provided under the said Notification No.03/2013-ST dated 01.03.2013 amending the Mega Exemption Notification No.25/2012-ST dated 20.06.2012 to insert the words 'food stuff' (their product yeast being a food stuff). 11. It has also been agitated by Ld. Advocate that excess amount was collected by the Revenue without authority of law and therefore it must compensate by granting the interest from the respective date of excess deposit till the date of payment of refund thereof. The Ld. Advocate has also placed reliance on various case laws in support of his submissions. 12. It was further submitted that the amount was paid by the Appellants under mistake of law in as much as the payment of Service Tax on GTA service availed by the Appellants was exempt since 01.03.2013. Thus, the Revenue had no authority to collect and retain the amount so paid under mistake of law. It is also submitted that in such cases the provisions of Section 11B are inapplicable. 13. It wa....
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....nding that amount paid by them was not Service Tax, but was in the nature of deposit with the Department. The Adjudicating Authority rejected their refund claim on the grounds of limitation and the Appeal filed by M/s KVR Construction before the Commissioner (Appeals) was rejected. M/s KVR Construction filed an Appeal before the Hon'ble High Court. The Hon'ble High Court (Single Judge Bench) held that Section 11B is inapplicable and the amount deposited was not a duty and had to be considered as a deposit with the Department. Revenue filed a review petition before the Division Bench of Hon'ble High Court. The Hon'ble High Court in Para 18 of their judgment observed as under: - "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 which even according to the department was not liable to be paid. Further, in Para 23 and Para 26, the Hon'ble Court observed and held as under:- 23. Now we are faced with a similar situation where....
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....refore, the limitation is also not applicable. Therefore, we find that the appellants are eligible for refund of interest as requested." [Emphasis Supplied] 20. It is apparently clear in the facts and circumstances of the case and in the light of the decisions of the Hon'ble High Court and this Tribunal that the payment was made by the Appellants under a mistaken belief and thus the amount was paid under mistake of law. The Revenue has no authority to retain the said amount as per provisions of Article 265 of the Constitution of India. Following these principles, the issue no. (i) is answered in favour of the Appellants that refund of the amount paid is admissible to them. 21. Now the second issue for consideration relates to the interest on the amount paid under mistake of law. 22. I take support in this regard from the decisions of the following cases: - 22.1 Gajendra Singh Sankhla, M/s I.P. Singh Construction Co. and M/s P.S. Builders Vs Commissioner of CGST, Jodhpur (Raj.) 2025 (5) TMI 482- CESTAT New Delhi. In this matter, Service Tax was deposited by the Appellants by mistake on construction of Individual/ Independent houses during the period 2012-....
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.....25/2012-ST dated 20.06.2012 and Notification No.30/2012-ST dated 20.06.2012. Thereafter, on realizing that the Appellants were not liable to pay Service Tax, the Appellants filed refund claim of the Service Tax paid by them during the period 01.10.2008 to 31.03.2016. It was decided that the activity undertaken by the Appellant is not liable to Service Tax and that the Service Tax paid by the Appellant by mistake of law and therefore time limit prescribed under Section 11B of the Central Excise Act, 1944 is not applicable to the facts of the case. In these circumstances, on the refund claim sanctioned to the Appellant, whether the Appellants are entitled to the interest or not, if yes then at what rate. It was finally decided in Para 14 and 15 of the order. "14. In view of this, I hold that the appellants are entitled for refund of service tax paid by them was under mistake of law, therefore, the appellants are entitled for refund claim along with interest @ 12% as provisions of Section 11B and 11BB of the Act are not applicable. 15. In view of this, I hold that the appellants are entitled for refund claim of the amount paid by the appellants and service recipient....