Custom, Excise & Service Tax Tribunal
K L R Chit Funds Pvt Ltd vs Principal Commissioner Of Gst&Amp; ... on 4 October, 2018
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IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
Appeal No.: ST/40179/2018
(Arising out of Order-in-Appeal No. CMB-CEX-000-APP-298-17
dated 02.11.2017 passed by the Commissioner of Central Excise and
Service Tax, Coimbatore)
M/s. K.L.R. Chit Funds Pvt. Ltd. : Appellant
Vs.
The Commissioner of G.S.T. & Central Excise, : Respondent
Coimbatore Commissionerate
Appearance:-
Shri. R. Balagopal, Consultant
for the Appellant
Shri. R. Subramaniyan, AC (AR)
for the Respondent
CORAM:
Hon'ble Shri P Dinesha, Member (Judicial)
Date of Hearing/Decision:17.09.2018
Date of Pronouncement: 04.10.2018
Final Order No. 42603 / 2018
This appeal has been filed by the assessee challenging the
refusal of refund of Rs. 3,04,983/-. It is the case of the appellant that
the appellant has provided Chit Fund Foreman Service and paid
service tax for the period 03.12.2012 to 07.01.2014. Subsequent to the
decision of the Hon'ble High Court of Delhi in the case of Delhi Chit
Fund Association Vs. U.O.I. - 2013 (30) S.T.R. 347 (Del.) which was
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decided on 23.04.2013 (S.L.P. against which was dismissed on
07.01.2014 by the Hon'ble Supreme Court), the appellant herein filed
an application for refund on 09.08.2016 contending that the Hon'ble
High Court of Delhi in the above case had held that no service tax
was chargeable on the services rendered by the foreman in a
business of chit fund. A Show Cause Notice thereafter was issued,
on 06.10.2016 pointing out inter alia that the appellant's claim was
liable to be rejected in terms of Section 11B of the Central Excise Act,
1944, to which the appellant filed its replies on various dates and
after due process of law, the adjudicating authority rejected the
refund claim on the ground of limitation. The appellant did not
meet with success in its first appeal before the lower appellate
authority, who vide the impugned Order dated 02.11.2017 rejected
its claim and therefore, the present appeal has been filed by the
assessee.
2. Heard Shri. R. Balagopal, Ld. Consultant appearing for the
appellant and Shri. R. Subramaniyan, Ld. Department
Representative (DR) appearing for the Revenue.
3.1 The arguments of the Ld. Consultant could be broadly
summarized as under :
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(i) That service tax was paid voluntarily and it is not the case of
the Revenue that there was unjust enrichment. The Revenue
has retained the amount without granting refund, which is
without any authority of law.
(ii) Limitation under Section 11B is not applicable since this is not
a case of unjust enrichment.
(iii) Without prejudice, the appellant's case should have been
considered if not under Section 11B, under sub-sections (5)
and (6) to Section 73A, etc.
3.2 Ld. Consultant also relied on the following decisions in
support of his contentions :
Enmas Andritz Pvt. Ltd. Vs. CESTAT, Chennai - 2017 (6) G.S.T.L. 12 (Mad.)
M/s. 3E Infotech Vs. CESTAT, Chennai & Anor. [2018-TIOL-1268-HC-
MAD-ST]
4.1 Per contra, Ld. DR inter alia submitted that any refund could
only be considered under Section 11B alone; that the time limit
prescribed under Section 11B having expired, the action of the lower
authorities was justified since the time limit prescribed is one year;
that the decision of the Hon'ble High Court of Delhi is in respect of
some other assessee, the benefit of which cannot be availed by any
other assessee in terms of Section 11B(5)(ec) of the Act; that the tax
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was paid voluntarily by the assessee on its own volition and even as
on date, they have not disputed the same but for claiming refund,
etc.
4.2 Ld. DR also relied on the findings of the lower appellate
authority at paragraph 7 of the Order and he also drew support
from the decision of the Hon'ble Bombay High Court in the case of
Maharashtra Cylinders Pvt. Ltd. Vs. CESTAT, Mumbai - 2010 (259)
E.L.T. 369 (Bom.).
5.1 I have considered the rival contentions, perused the
documents placed on record and have also gone through the
decisions referred to during the course of arguments. Section 73A of
the Finance Act, 1994 which has been relied on by the Ld.
Consultant reads as under :
"73A. Service tax collected from any person to be deposited with Central
Government. -- (1) Any person who is liable to pay service tax under the
provisions of this Chapter or the rules made thereunder, and has collected any
amount in excess of the service tax assessed or determined and paid on any
taxable service under the provisions of this Chapter or the rules made thereunder
from the recipient of taxable service in any manner as representing service tax,
shall forthwith pay the amount so collected to the credit of the Central
Government.
(2) Where any person who has collected any amount, which is not required to be
collected, from any other person, in any manner as representing service tax,
such person shall forthwith pay the amount so collected to the credit of the
Central Government.
(3) Where any amount is required to be paid to the credit of the Central
Government under sub-section (1) or sub-section (2) and the same has not been
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so paid, the Central Excise Officer shall serve, on the person liable to pay such
amount, a notice requiring him to show cause why the said amount, as specified
in the notice, should not be paid by him to the credit of the Central Government.
(4) The Central Excise Officer shall, after considering the representation, if any,
made by the person on whom the notice is served under sub-section (3),
determine the amount due from such person, not being in excess of the amount
specified in the notice, and thereupon such person shall pay the amount so
determined.
(5) The amount paid to the credit of the Central Government under sub-section
(1) or sub-section (2) or sub-section (4), shall be adjusted against the service tax
payable by the person on finalisation of assessment or any other proceeding for
determination of service tax relating to the taxable service referred to in sub-
section (1).
(6) Where any surplus amount is left after the adjustment under sub-section (5),
such amount shall either be credited to the Consumer Welfare Fund referred to
in section 12C of the Central Excise Act, 1944 (1 of 1944) or, as the case may be,
refunded to the person who has borne the incidence of such amount, in
accordance with the provisions of section 11B of the said Act and such person
may make an application under that section in such cases within six months
from the date of the public notice to be issued by the Central Excise Officer for
the refund of such surplus amount."
5.2 From a bare reading of the above Section, the following points
emerge :
Liability to pay service tax and the same has been collected in
excess.
The same has been paid to the credit of Central Government.
The amount paid to the credit of Central Government shall be
adjusted against the service tax liability on 'finalization of
assessment' or any other proceedings; and
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If any surplus is left after adjustment, the same to be credited
to the Consumer Welfare Fund (under Section 12C) or
refunded to the person who has borne the incidence in terms
of Section 11B with a pre-condition that such person should
make an application of refund within six months from the
date of public notice to be issued in this regard.
5.3 From a conjoint reading of Section 73A and Section 11B, it is
clear that as per Section 11B, an application for refund shall be made
before the expiry of one year from the relevant date in such form
and manner as prescribed and from a reading of the above Sections
it is also clear that Section 73A talks of deposit of Revenue into
Government account alone whereas Section 11B deals with claim for
refund of duty paid, if any. The role of each of the Sections is
specific as per their headings :-
Section 73A. Service Tax collected from any person to be deposited with
Central Government
Section 11B. Claim for refund of duty and interest, if any, paid on such
duty.
5.4 When it comes to dealing with refund, Section 73A takes the
backseat leaving it to Section 11B to take it forward and nowhere in
Section 73A does it prescribe a separate application. Viewed from
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this angle, the word 'may' used in Section 73A(6) is required to be
construed as 'shall' since, otherwise, the Department not having any
machinery to work out refund or related issues on its own without
there being any application for the same, cannot lead the way.
5.5 The discussion above ultimately points out that the refund
claim made by an assessee, if found in order, has to be entertained
only on an application in terms of Section 11B alone and therefore,
an assessee claiming refund has to pass through the tests prescribed
under Section 11B.
6. Admittedly, in the case on hand, the tax has been paid
voluntarily by the assessee-appellant and there is no plea by the
assessee-appellant that the same was paid by mistake or that there
was any ignorance on the part of the appellant while making the
payment or that there was any demand raised by the Revenue
authorities. For this reason alone, as pointed out by the Ld. DR,
decisions relied on by the Ld. Consultant are distinguishable.
7. The plea of the Ld. Consultant that if not under Section 11B,
the relevant application was required to be considered and disposed
of in terms of Section 73A does not merit consideration since Section
73(a) rests on Section 11B for any refund to be granted and that sub-
Section (6) of Section 73A talks only of adjustment of refund which
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pre-supposes the determination of tax liability and only the surplus
that could be refunded.
8. Apart from the above, the sub-clause (ec) to Section 11B(5)
which reads as under :
SECTION [11B. Claim for refund of [duty and interest, if any, paid on
such duty]. -- (1) Any person claiming refund of any [duty of excise and
interest, if any, paid on such duty] may make an application for refund of such
[duty and interest, if any, paid on 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 documents referred to in section 12A) as the
applicant may furnish to establish that the amount of [duty of excise and
interest, if any, paid on such duty] in relation to which such refund is claimed
was collected from, or paid by, him and the incidence of such [duty and interest,
if any, paid on such duty] had not been passed on by him to any other person :
....
....
(5)....
....
[(ec) in case where the duty becomes refundable as a consequence of judgment, decree, order or direction of appellate authority, Appellate Tribunal or any court, the date of such judgment, decree, order or direction;]
(f) in any other case, the date of payment of duty.] also makes it further clear that a duty would become refundable as a consequence of judgement, etc., implying that such judgement, etc., should only be in the assessee's case and not in any other case. Further, even if the benefit is to be extended to the assessee of the judgement of Hon'ble Delhi High Court which was pronounced on 23.04.2013 and approved by the Hon'ble Supreme Court on 9 07.01.2014, subject to the satisfying of other conditions as to the validity of its claim under statute, an application for refund should have been filed within one year from the date of the Order of the Hon'ble Supreme Court in terms of Section 11B.
9. The other point worth nothing is that the amount was paid by the appellant as service tax. The refund of the same was claimed because of the classification made by the Department, by virtue of which the service involved became a non-taxable entity. Therefore, this is a case squarely falling within the provisions of the Central Excise Act, 1944 and hence, the rule of limitation under Section 11B applies. A perusal of the Refund Request View dated 03.08.2016 filed by the appellant makes it abundantly clear that the said application for refund was made invoking Section 11B of the Act ibid., and therefore I am clear that when this provision is invoked, the same applies with full force including the rule of limitation prescribed therein.
10. From the above discussions, it is therefore clear that there has been a delay of more than two years and it only points out that it is clearly an afterthought, to claim the benefit of a judgement that such an application for refund was made; and on perusal of the appeal 10 records, I find that the assessee has nowhere whispered any reasons as to such an inordinate delay in making its application for refund.
11. For the above reasons, I am of the considered view that the impugned Order does not require any interference and therefore, I dismiss the appeal.
(Pronounced in open court on 04.10.2018) (P Dinesha) Member (Judicial) Sdd