Custom, Excise & Service Tax Tribunal
Saf Yeast Company Private Limited vs Commissioner Of Cgst & Central ... on 11 June, 2024
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
MUMBAI
REGIONAL BENCH
Service Tax Appeal No. 86133 of 2020
(Arising out of Order-in-Appeal No. PUN-EXCUS-001-APP-027/2020-21 dated
26.08.2020 passed by the Commissioner of Central Tax (Appeals-I), Pune.)
M/s. Saf Yeast Company Pvt. Ltd. ........Appellant
419 Swastik Chambers,
Chembur, Mumbai - 400 071
VERSUS
Commissioner of CGST & CE, Kolhapur ........Respondent
Vasant Plaza, Commercial Complex, Rajaram Road, Bagal Chowk, Kolhapur, Maharashtra - 416 001 APPERANCE:
Shri Vishal Agarwal, Advocate with Shri Sunil Navandhar, Advocates for the Appellant Shri S.B.P. Sinha, Supdt., Authorised Representative for the Respondent CORAM:
HON'BLE DR. SUVENDU KUMAR PATI, MEMBER (JUDICIAL) HON'BLE MR. ANIL G. SHAKKARWAR, MEMBER (TECHNICAL) FINAL ORDER NO. 85581/2024 Date of Hearing: 22.04.2024 Date of Decision: 11.06.2024 PER: DR. SUVENDU KUMAR PATI Denial of refund of ₹85,83,430.15 of Service Tax paid erroneously for GTA under Reverse Charge Mechanism for the period between December 2013 and June 2017, claimed vide refund application dated 07.09.2014, on the primary ground of limitation by the Refund Sanctioning Authority, that got confirmed by the Commissioner (Appeals) in denying relief to the Assessee-Appellant before him, is assailed in this appeal.
ST/86133/2020 2
2. Facts of the case, in a nutshell, is that Appellant Company is engaged in manufacture of Yeast, classifiable under Chapter Sub-heading 2102.20.00, in one of its factories at Chiplun under Ratnagiri District and it was transporting effluent generated from fermentation of sugar during production of Yeast to Dr. Balsaheb Sawant Konkan Krishi Vidyapeeth for research purpose to find out suitability of factory waste for growing rice and vegetable and it has also commissioned study on it in the said Vidyapeeth. Appellant had taken Service Tax registration for services relating to Goods Transport Agency (GTA) and Manpower Supply Agency Services. It had also paid Service Tax on reverse charge basis in respect of freight bills raised by the transporters for transportation of effluent but after coming across the judgment of this Tribunal passed by its Chennai Bench in the case of Oil And Natural Gas Corporation Ltd. Vs. Commissioner of Central Excise and Service Tax, Tiruchirapalli in final order No. 42114/2018 dated 23.07.2018 wherein such transportation of effluents were treated to be as not goods transportation and Service Tax was held to be not payable, it had applied on 07.09.2018 for refund of the above referred amount for the period mentioned in the preceding paragraph but received a show-cause notice dated 14.11.2018 proposing denial of refund on the ground that refund claim was filed beyond the time limit prescribed under Section 11B(1) of the Central Excise Act 1944, equally applicable to Service Tax matters, in view of operation of Section 83 of Finance Act, 1994. Appellant submitted its reply, ST/86133/2020 3 unsuccessfully contested the matter before the Adjudicating Authority, then approached the Commissioner (Appeals) through appeal proceeding without any fruitful result. In the present appeal the legality of the confirmation of rejection of refund by the Commissioner (Appeals) is assailed before this Tribunal.
3. During the course of hearing, learned Counsel for the Appellant Mr. Vishal Agarwal submitted that learned Commissioner had transgressed beyond the scope of show-cause notice and while rejecting the appeal against rejection of refund on the ground of limitation, he had also followed the decision of this Tribunal and of the Hon'ble Supreme Court passed in the case of Priya Blue Industries Ltd. concerning maintainability of refund in the absence of reassessment but this issue has been set at rest after the order of Larger Bench of this Tribunal was passed, taking note of the ratio of judgment delivered in the case of ITC Limited Vs. Commissioner of Central Excise, Kolkata-IV reported in 2019 (368) ELT 216 (S.C.) that denied refund claim without modification of order of assessment/re-assessment passed in respect of Customs Act, giving its finding in the case of M/s. Shree Balaji Warehouse & Others Vs. Commissioner of Central Excise & Service Tax, Panchkula decided on 29.09.2023 that refund of Service Tax is maintainable in the absence of any challenge to the assessment order or reassessment in appeal under the Finance Act, 1994. He further submitted that in view of the decision of the Hon'ble Bombay High Court dated 28.10.2015 passed in the case of CCE, Nagpur Vs. M/s. SGR Infratech Ltd. in CE ST/86133/2020 4 Appeal No. 26 of 2014, of this Tribunal in SGR Infratech Ltd. Vs. Commissioner of Central Excise, Nagpur reported in 2014 (11) TMI 755 - CESTAT Mumbai and of the Hon'ble Bombay High Court also in the case of M/s. In House Productions Ltd. Vs. Commissioner of Service Tax, Mumbai reported in 2017-TIOL-1242-HC-MUM-CX, the issue has no more remained ambiguous that refund is to be allowed if payment is made under mistake of law and the said judgments squarely covers the issue of refund that was mistakenly paid by the Appellant as it was believed to be a Service Tax due by the Appellant. He also placed his reliance on the decision of several High Courts passed on the issue namely Parijat Construction Vs. CCE, Nashik reported in 2018 (359) ELT 113 (Bom.), National Institute of Public Finance & Policy reported in 2019 (20) GSTL 330 (Del.), 3E Infotech reported in 2018 (18) G.S.T.L. 410 (Mad.); Swastik Sanitarywares Ltd. reported in 2017 (49) S.T.R. 484 (Guj.); Indo- Nippon Chemicals Co. Ltd. reported in 2005 (185) E.L.T. 19 (Guj.); Petition for Special Leave to Civil Appeal dismissed by the Hon'ble Supreme Court reported in 2055 (186) ELT A117 (SC), by which refund arising due to absence of levy or payment made mistakenly was allowed. In toto he pleads for acceptance of the appeal filed by the Appellant by setting aside the order by the Commissioner (Appeals).
4. Per contra, Learned Authorised Representative for the Respondent-Department Mr. S.B.P. Sinha placed his reliance on the decision of Mafatlal Industries Limited Vs. Union of India reported in ST/86133/2020 5 1997 (89) ELT 247 (SC), and the decision of the Hon'ble Punjab & Haryana High Court in the case of Sarita Handa Exports (P) Ltd. reported in 2015 (321) ELT 434 (P&H) and argued that duty paid that was not payable cannot be refunded if the same is sought to be refunded after the period of limitation prescribed under Section 11B of the Central Excise Act, 1944 was over even when the said erroneous payment would be in violation of Article 265 of the Constitution of India unless refund arises as a consequence of declaration of a provision in the statue as unconstitutional. He took us to para 9 of the Order-in-Appeal to substantiate that Appellant also had relied on the judgment of Parijat Construction cited supra and KVR Constrictions reported in 2012 (26) STR 195 (Kar) and submitted that learned Commissioner (Appeals) had distinguished those judgments where tax was held to be not payable by virtue of exemption extend through CBEC Circular, whereas in the present case, Service Tax was paid under mistake of law, in which period limitation was rightly invoked by the Commissioner (Appeals) that needs no interference by this Tribunal.
5. We have gone through the case record, relevant provision of law and relied upon judgments submitted by the adversaries. At the outset we would like to place on record that refund was rejected by the Refund Sanctioning Authority that also had received the approval of Commissioner (Appeals) on the ground of limitation and on merit. Maintainability of a proceeding on the ground of limitation being ST/86133/2020 6 preliminary issue, the same is taken up at the first instance to render our findings on the issue.
6. Section 11B of the Central Excise Act, 1944 deals with claim of refund of duty and interest, if any, paid on such duty by making an application for refund before expiry of one year from the relevant date, which in the instant case is the date of payment. In view of operation of Section 83 of the Finance Act, 1994 refund of Service Tax under the Finance Act would also be done as per provision contained under Section 11B of the Central Excise Act, 1944. Admittedly, as revealed from appeal memo and the order passed by the Authorities below, for the period between December 2013 to June 2017, concerning payment of Service Tax refund application was made on 07.09.2018 after Appellant came to know that Service Tax was not payable on transportation of effluent. To Appellant, which it has also tried to establish through some judicial decisions, it was a payment made under mistake of law and not a payment of duty for which period of limitation prescribed under Section 11B of the Central Excise Act can be made applicable but to our considered view, it had made payment of Service Tax after ascertaining the same to be payable and subsequently discovered upon pronouncement of order by this Tribunal that Service Tax was not payable. Be that as it may, when claim of refund was filed under Section 11B of the Central Excise duty that deals with only refund of duty and interest, we are of the view that the period of limitation for such filing of claim would operate.
ST/86133/2020 7
7. Before delving more into the detail of facts, it is imperative to have a look at the legislative intent of introduction of period of limitation in respect of suit, appeal and application through the Limitation Act that was brought into the statute book in 1859 and had undergone changes through amendments made into the same in 1871, 1877, 1908 and ultimately in 1983. The object of this Act can be stated to be a prescription of a time periods within which a 'right' can be enforced in a Court of Law. To start with the words of "Salmond", as quoted in his book on jurisprudence, "the law comes to the assistance of the vigilant and not to the sleepy". Further it can be said that law of limitation finds its root to the maxims "interest republicae ut sit finis litum" which means that in the interest of the State as a whole there should be a limit to litigation and "vigilantibus non dormientibus Jura subveniunt" which means the law will assist only those who are vigilant with their rights and not those who sleep upon it. Hon'ble Apex Court has better explained the reason of having law of limitation in the famous judgment of Pundilk Jalam Patil (D) by Lrs. Vs. Executive Engineer Jalgaon Medium Project & Anr. In SLP (C) Nos. 21011-21014/2007 in Civil Appeal Nos. 6414-6417/2008, Judgment, dated 03.11.2008. It would be beneficial to quote paras 22, 23 of the Judgment, which reads as under:-
"22. Basically the laws of Limitation are founded on public policy. In Halsbury's Laws of England, 4th Ed., Vol. 28,p.266,para 605, the policy of the Limitation Acts is laid down as follows:
ST/86133/2020 8 "The courts have expressed at least three different reasons supporting the existence of statutes of limitation, namely, (i) that long dormant claims have more of cruelty than justice in them, (ii) that a defendant might have lost the evidence to dispute the stated claim, (iii) that persons with good causes of actions should pursue them with reasonable diligence".
"23. Statutes of limitation are sometimes described as 'statutes of peace'. An unlimited and perpetual threat of limitation creates insecurity and uncertainty; some kind of limitation is essential for public order. This court in Rajender Singh and others vs. Santa Singh and others [(1973) 2 SC 705] has observed: "the object of law of Limitation is to prevent disturbance and deprivation of what may have been acquired in equity and justice by long enjoyment or what may have been lost by a party's own inaction, negligence or latches". In motichand vs. Munshi [(1969) 2 SSC 824], this court observed that this principles is based on the maxim "interest republicae ut sit finis litum, that is the interest of the State requires that there should be end to litigation but at the same time law of Limitation are a means to ensuring private justice suppressing fraud and perjury, quickening diligence and preventing oppression".
The reasons of placing the findings of the Hon'ble Supreme Court in the above paragraph in this litigation concerning fiscal statute, in which in view of the pronouncement of Hon'ble Apex Court in the case of M.P. Steel Corporation Vs. Commissioner of Central Excise reported in (2015) 7 SCC 58 was to the effect that Limitation Act would not be applicable to fiscal statute (only its spirit can be applied) is that Section 29(2) of the said Limitation Act provides that when limitation is prescribed in special statute, the general provision ST/86133/2020 9 of Limitation Act would not be made applicable. In the Central Excise Act for the purpose of refund limitation of one year being specifically provided under Section 11B, it is now to be examined as to if that would be applied strictly in cases of all refunds when such erroneous payment was demonstratively held to be a payment under mistake of law. Before entering into the analysis of its admissibility, we consider it to place it on record that spirit of Section 3 of the Limitation Act that also deals with application and appeals, would go to say that law of limitation only Bars the judicial remedy and does not extinguish the right.
8. To settle divergent decisions on this issue of refund at rest, a nine judges Constitution Bench of the Hon'ble Supreme Court was constituted exclusively to deal with all kinds of refund issues under the Customs Act and Central Excise Act in the case of Mafatlal Industries Ltd. Vs. Union of India reported in 1997 (89) ELT 247 (S.C.) and its findings are the law of the land in view of operation of Article 141 of the Constitution of India and any subsequent development of law on the issue of refund, like doubt or ambiguity in the proposition, must go in consonance with the discussion and propositions available in the body of the said judgment, as has been held in para 99 of the said judgment. Its sub-para 4 has provided an answer to the present dispute, for which it would be apt to reproduce the same in the following paragraph:
(iv) It is not open to any person to make a refund claim on the basis of a decision of a Court or Tribunal rendered in the case of another person.
ST/86133/2020 10 He cannot also claim that the decision of the Court/Tribunal in another person's case has led him to discover the mistake of law under which he has paid the tax nor can he claim that he is entitled to prefer a writ petition or to institute a suit within three years of such alleged discovery of mistake of law. A person, whether a manufacturer or importer, must fight his own battle and must succeed or fail in such proceedings. Once the assessment of levy has become final in his case, he cannot seek to reopen it nor can he claim refund without re-opening such assessment/order on the ground of a decision in another person's case. Any proposition to the contrary not only results in substantial prejudice to public interest but is offensive to several well established principles of law. It also leads to grave public mischief. Section 72 of the Contract Act, or for that matter Section 17(1)(c) of the Limitation Act, 1963, has no application to such a claim for refund.
(Underline to emphasise)
9. This being the findings of the Hon'ble Supreme Court there cannot be any departure from the fact that any decision of the Tribunal came subsequently that if helps an Assessee to discover the mistake of law under which he has paid any tax, he won't be entitled to seek recovery of the tax paid, not even through a civil proceeding. While acknowledging this findings, learned Counsel for the Appellant has taken us to the findings of the Commissioner concerning final assessment/reopening of assessment and even to the other order of Hon'ble Supreme Court in Kamala Mills Ltd. case [1966 (1) SCR 64], that was extensively discussed in Mafatlal Industries Ltd. case, but those discussions are fruitless and redundant for the reason that in the above quoted paragraph, it is clearly mentioned that without ST/86133/2020 11 reopening such assessment/order on the basis of decision, refund was not possible but such reopening or re-assessment itself is impermissible in law. That is what we understood from the plain language of the text. In other words on the basis of the findings of the Tribunal/High Court/Supreme Court given in respect of another person, reopening of assessment is not permissible and without reassessment refund can't be granted. In our considered view that also finds acceptance by the Amended Section (2) of the Finance Act, 1994 that self-assessment is also an assessment order, limitation would run from the date of self-assessment, if not from the date of payment.
10. We are, therefore, of the considered view that Appellant is not entitled to get the refund as claimed by it for the reason that such claim was made after the period of limitation was over and the judgment of the Hon'ble Bombay High Court in the case of CCE Nagpur Vs. SGR Infratech Ltd., cited supra, in which paragraph 27 of the Mafatlal Industries Ltd. judgment dealing with correctness of proposition of Kanhaiyalal decision was dealt with, would have no bearing on the findings of Hon'ble Supreme Court judgment noted in the para 99(4), as reproduced above is followed with consistent decisions in such a scenario, including the one cited by learned AR in the case of Sarita Handa Exports (P) Ltd. cited supra of the Hon'ble Punjab & Haryana High Court following Mafatlal Industries Ltd. cited supra is available to the effect that refund application beyond the period specified under Section 11B of the Central Excise Act, 1944 ST/86133/2020 12 could not be entertained unless refund arose in consequence of a declaration of a provision/statute as unconstitutional, which is admittedly not the fact in the present case. Hence the order.
THE ORDER
11. The appeal is dismissed and the order passed by the Commissioner of Central Tax (Appeals-I), Pune vide Order-in-Appeal No. PUN-EXCUS-001-APP-027/2020-21 dated 26.08.2020 is hereby confirmed.
(Order pronounced in the open court on 11.06.2024) (Dr. Suvendu Kumar Pati) Member (Judicial) (Anil G. Shakkarwar) Member (Technical) Prasad