Custom, Excise & Service Tax Tribunal
M G Motors vs Alwar on 18 September, 2023
CUSTOMS EXCISE & SERVICE TAX APPLELLATE TRIBUNAL
PRINCIPAL BENCH, NEW DELHI
COURT No. IV
Service Tax Appeal No. 54827 of 2023
(Arising out of Order-in-Appeal No.140-RLM-ST-JPR-2023 dated 10.5.2023 passed by
the Commissioner (Appeals), CGST & Service Tax, NCRB, Statue Circle, Jaipur)
M/s.M.G. Motors
Tijara Road, Near Leyland Circle,
Appellant
Alwar
RAJASTHAN -301001
Vs.
COMMISSIONER, CGST & SERVICE TAX,
A,Surya Nagar, Alwar,
Rajasthan-301001
Respondent
APPEARANCE:
Mr.Ajay Mishra, Advocate for the Appellant Mr. Vishawjeet Saharan, Authorised Representative for the Respondent CORAM:
HON'BLE DR.RACHNA GUPTA, MEMBER (JUDICIAL) FINAL ORDER NO.51421/2023 Date of Hearing: 18/09/2023 Date of Decision: 18/09/2023 DR.RACHNA GUPTA:
The present appeal is filed to assail Order-in-Appeal No. No.140- RLM-ST-JPR-2023 dated 10.5.2023, vide which refund claim of the appellant has been rejected.
2. The facts of case, as relevant are as follows:
3. Initial show cause notice dated 15.10.2014 was served upon the appellant alleging that an amount of Rs.1,13,27,270/- has not been paid by the appellant during the period 2009-10 to 2012-13 in 2 ST/54825/2023 contravention of Rule 6 (3) (i) of Cenvat Credit Rules, 2004. The said amount was payment to be received alongwith interest and imposition of penalty. The said proposal was confirmed vide Order-in-Original bearing No.021-14-15 dated 27.3.2015. An appeal against the said order was filed. Thereafter, this Tribunal passed Final Order No.51578/2019 dated 13.11.2019 holding that the extended period of limitation could not have been invoked by the department. The demand for extended period with effect from 2009 to 2012 was set aside. The matter was remanded to the adjudicating authority to re-determine amount of service tax on trading activity of the appellant. However, only for the normal period, in light of the Tribunal's previous order No.A/51170-51171/2019-Ex dated 17.7.2019 in appeal No.E/50924- 50925 of 2018. The Commissioner, CGST, Alwar while complying with those directions passed the Order-in-Original No.02/ST/R/2021 dated 23.10.2020 confirming demand of Rs.1,02,309/- for the normal period (Oct.,2012 to March,2013).
4. The appellant had already filed an application dated 03.09.2021 seeking refund of Rs. 4,22,832/- which was paid for the period from April,2009 (01.04.2009) to September,2012 alongwith interest of Rs.2,42,515/-. Amount of Rs.1,02,309/- as was confirmed for the period October, 2012 to March, 2013)(normal period) vide said O-I-O dt.23.10.2020, was also already deposited. However, the said refund application was proposed to be rejected vide show cause notice dated 25.10.2020 on the ground that the amount was voluntarily deposited. The proposal was accepted and the refund claim of Rs.6,65,347/-
3 ST/54825/2023 (Rs.4,22,832+Rs.2,42,515). The Appeal against the said order has been rejected vide the Order-in-Appeal under challenge. Being aggrieved, the appellant is before this Tribunal.
5. Heard Shri Ajay Mishra, ld. Advocate for the appellant and Shri Vishwajeet Saharan, ld. DR for the department.
6. Ld.Counsel for the appellant has mentioned that the amount in question was paid pending adjudication of show cause notice as was issued on 15.10.2014 which was adjudicated vide order dated 27.2.2015. Since the demand for the extended period stands already set aside consequent thereto the major portion of demand has been set aside. The amount as was deposited pending adjudication has acquired the character of pre-deposit. There is no time limit applicable for seeking refund of the amount of pre-deposit. Hence the refund should have been granted. Ld. Counsel also impressed upon that the Order-in- Original as well as the one under challenge are miserably silent about citing any ground for rejecting refund claim. While relying upon the decision of Hon'ble Supreme Court in the case of Mafatlal Industries Ltd. vs. Union of India, 1997 (89) ELT (SC). The order under challenge is prayed to be set aside and appeal to be allowed.
7. While rebutting these submissions, ld.DR has mentioned that the amount of Rs.1,13,27,270/- was proposed to be recovered vide show cause notice 15.10.2014 and was confirmed by the Commissioner vide order dated 27.03.2015. The final order of CESTAT dated 13.11.2019 confirmed the demand only for normal period and remanded for 4 ST/54825/2023 determining amount which was determined as Rs.1,02,309/-vide Order-in-Original dated 23.10.2020. Hence the amount deposited pending as adjudication of the proposed demand of duty was an amount towards duty liability of appellant. Otherwise also amount was voluntarily deposited by the appellant as has been observed by both adjudicating authorities below. Ld. DR has also brought to the notice that the appellant also deposited amount of Rs.8,49,545/-, while challenging the demand of Rs.1,13,27,270/- crores. The said amount was pre-deposit under section 35F of the Central Excise Act,1944. The same had already been refunded in terms of section 35FF of the Act. In the given circumstance, amount in question (Rs.6,65,347/-) cannot be called as amount of pre-deposit but an amount of duty. Hence the time limit under section 11B of Central Excise Act, 1944 shall be applicable to the demand. The decision of Hon'ble Gujarat High Court in the case of Ajni Interiors vs. Union of India-2019 (9) TMI 529 has been relied upon to emphasize that the payment made by the assessee towards excise duty can never be considered as pre-deposit under section 35F. Hence, the time limit prescribed under section 11B shall be applicable. Impressing upon, no infirmity in the order and that the claim have been hit by time limitation, the order is prayed to be upheld and the appeal is prayed to be dismissed.
8. Having heard rival contentions and perusing the entire record including appeal memo, final order dated 13.11.2019 as has been obtained through the case information system, it is observed that this Tribunal had set aside the entire demand pertaining to the extended 5 ST/54825/2023 period of limitation prior to 2012. The only demand re-determined for the normal period is for an amount of Rs.1,02,309/-. This is also observed that pending adjudication after issuance of show cause notice dated 15.10.2014 the appellant had deposited Rs.5,25,141/- alongwith interest Rs.2,77,582/- vide two separate challans dated 5.12.2014. After order of this Tribunal for confirming demand for normal period, the appellant had filed application dated 3.9.2021 claiming refund of amount deposited minus the amount as was to be confirmed for the normal period. The said refund application has been rejected on the ground that the amount was not the amount under section 35F of the Central Act.1944. Also while relying upon the decision of Hon'ble Gujarat High Court in the case of M/s.Ajni Interiors (supra) that refund claim is held to be filed beyond the prescribed period of limitation. The said order has been confirmed vide order under challenge. Thus following need to be adjudicated:
(a) Whether the amount has rightly been denied to be an amount under section 35F of Central Excise Act, 1944 wrongly (CEA)?
(b) Whether the period of limitation has wrongly been applied?
9. With respect to first issue, Hon'ble Apex Court in the case of Mafatlal Industries Ltd. (supra) has held that amount paid during pendency of investigation/adjudication shall be treated as the amount paid under protest akin to the amount of pre-deposit under section 35F (CEA). I observe that there is no denial to the fact that Rs.8,49,545/- was deposited under section 35F in addition to impugned amount has 6 ST/54825/2023 already been refunded to the appellant. Hence irrespective the amount in question being the amount paid under protest has acquired the character of amount pre-deposit, but the said amount cannot be called as amount deposited under section 35F. Hence the question of applicability of section 35FF does not arise.
10. The only another provision for refund under CEA is section 11B. It is also admitted fact that amount of Rs.4,22,832/- was deposited after issuance of show cause notice towards proposed duty only. Thus refund will fall under section 11B only. Pursuant to the final order of this Tribunal, vide O-I-O dated 23.10.2020, the duty demand confirmed is only to the extent of Rs.1,02,309/-. Hence the balance of the amount deposited being akin to pre-deposit, is to be refunded to the appellant alongwith interest.
11. Coming to second issue of limitation, once it is and held that the refund is under section 11B of the Act, the time limit of one year is applicable to the said refund. The said time limit from the relevant date has been explained under sub-clause 5 of section 11B. Sub-section 5 of clause (ec) of section 11B reads as follow:-
"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."
12. No doubt final order of this Tribunal dated 13.11.2019 has set aside major portion of demand as pertaining to extended period. However, quantum of demand for the normal period got re-determined 7 ST/54825/2023 by Order-in-Original No.ALW-ST-OIO-COM-02-20-21 dated 23.10.2020 as an amount of Rs.1,02,309/-. Hence, the relevant date in the given circumstance is held to be the date of Order-in-Original dated 23.10.2020. The refund claim was filed on 03.09.2021. It becomes clear that the refund claim was well within the limit prescribed by the Statute. Hence, the refund claim has wrongly been barred by limitation. Admittedly an amount of Rs.5,25,141/- alongwith amount of interest (Rs.2,45,515/-) was already deposited with the department. After appropriating the same to the extent of demand confirmed, the balance amount of Rs.4,22,832/- plus Rs.2,45,515/- i.e.Rs.6,65,347/-, is to be refunded. The department cannot retain the same for want of any authority with them to retain. Hence they are held liable to refund the same alongwith the interest @ 6% from the date of order dated 23.10.2020 till the date of payment thereof.
13. With these observations, the order under challenge is set aside. Consequent thereto, the appeal is allowed with said consequential benefits.
(Order dictated in open court) (DR.RACHNA GUPTA) MEMBER (JUDICIAL) mk