Custom, Excise & Service Tax Tribunal
M/S. Nobles Constructions Gujarat Pvt. ... vs Commissioner Of Service Tax, Ahmedabad on 20 November, 2015
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Zonal Bench, Ahmedabad Appeal No. : ST/13808/2014 (Arising out of OIA-AHM-SVTAX-000-APP-137-14-15 dated 01.10.2014, passed by Commissioner (Appeals) Central Excise, & S.T., Ahmedabad) M/s. Nobles Constructions Gujarat Pvt. Limited : Appellant (s) VERSUS Commissioner of Service Tax, Ahmedabad : Respondent (s) Represented by : For Appellant (s) : Shri Dhaval K. Shah, Advocate For Respondent (s) : Shri S. Shukla, Authorised Representative For approval and signature : Mr. P.M. Saleem, Honble Member (Technical) 1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3 Whether their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes CORAM : Mr. P.M. Saleem, Honble Member (Technical) Date of Hearing / Decision : 20.11.2015 ORDER No. A/11689/2015 Dated 20.11.2015 Per : Mr. P.M. Saleem The appellant herein is a service tax assessee. The appellant paid an amount of Rs. 5,30,820/- in April 2010 by mistake as service tax liability whereas the appellant was liable to pay service tax of Rs. 1,85,783/- only. Realising their mistake, they vide their letter dated 16.07.2010, addressed to the Dy. Commissioner, Service Tax requested to keep the excess amount of Rs. 3,45,037/-, as deposit to be adjusted later against future service tax liability. However, due to no business, subsequent service tax liability arose only in March 2012 and the department adjusted Rs. 1,87,395/-, against the service tax liability which had arisen at that point of time. Since they did not have any business further, they requested to return the balance amount of Rs. 1,57,642/- vide their letter dated 16.07.2012. A show cause notice was issued on 16.10.2012 to show cause why their claim for refund of the said amount should not be rejected. By the impugned Order-in-Original, the Dy. Commissioner, Service Tax sanctioned the refund claim. Revenue thereafter filed an appeal with the Commissioner (Appeals) who decided against the appellant on the ground that refund claim was hit by limitation. Aggrieved by the same, the appellant is before us. 2. Heard both sides. The learned Counsel for the appellant takes us through the facts of the case. He submits that the excess amount paid by them in April 2010 was by mistake of law. However, they had requested immediately on 16.07.2010 that the excess amount paid by them may be kept as deposit to be adjusted against the future service tax liabilities. Therefore, there is no question of advance payment of tax in this matter and the amount was only a deposit. A part of the same was adjusted against the service tax liability which arose in March 2012, and against part of the excess amount there was no liability and Revenue has not raised any objection for the same and had not raised any demand. It is his submission that they would have utilised the remaining amount also for paying service tax if they had any business. However, since there was no business subsequently, they had requested the department to return the remaining amount which was only a deposit with the department. He therefore, argued that there is no issue of limitation in this matter and they are eligible for the refund as rightly sanctioned by the original adjudicating authority. 3. On the other hand, learned Authorised Representative for the Revenue submits that the amount was paid in April 2010 as service tax, though by mistake. Therefore, the provisions of Section 11B(2) will be applicable in this case and the appellant should have filed the refund claim within one year of payment of the said amount in April 2010. Hence, the refund claim is hit by limitation. 4. On consideration of the arguments of both sides and perusal of the records, it is observed that the appellant had requested the department on 16.7.2010 in writing that the excess amount paid by them in April 2010 may be kept as deposit with the department to be adjusted against any future liability of service tax. Hence, we find force in the arguments of the learned Advocate that the amount should be treated as deposit only. As only the part of the amount could be utilised subsequently in 2012 and the balance amount could not be utilised, the balance amount which is only a deposit, should be refunded to them. 5. The issue, whether refund of such amount can be denied under the provisions of Section 11B, is no more res-integra as the Tribunal and various High Courts in a number of cases have held to the contrary. For better appreciation, the relevant portions of a few decisions are reproduced below:- (a) This Bench of the Tribunal in the case of CCE, Ahmedabad vs. Shayona Enterprises [2008 (230) ELT 378 (Tri. Ahmd.)] held as follows:- 4.?After hearing both the sides, I agree with the appellate authority that the deposits made during the investigations are in the nature of provisional deposits and if the said deposit is not appropriated towards any final demand of duty or penalty, the same cannot be called to be deposit of duty, in which case the limitation provisions will not come into action. Learned DRs reliance on the Honble Supreme Courts decision in the case of M/s. Miles India Ltd. [1987 (30) E.L.T. 641 (S.C.)] and the Tribunals decision in the case of M/s. Bajaj Foods Limited - [2007 (209) E.L.T. 191 (Tri.-Ahmd.)] laying down that the statutory authorities are bound by the limitation provided under the Act, are not relevant inasmuch as the deposit in question is not duty and the assessee is not seeking refund of duty so as to act beyond limitation provisions. (b) Further, in a recent case, the Honble High Court of Karnataka in the case of CCE, Bangalore vs. KVR Construction [2012 (26) STR 195 (Karnataka)], in Paras 19, 22 and 23 held as under:- 19.?According to the appellant, the very fact that said amounts are paid as service tax under Finance Act, 1994 and also filing of an application in Form-R of the Central Excise Act would indicate that the applicant was intending to claim refund of the duty with reference to Section 11B, therefore, now it is not open to him to go back and say that it was not refund of duty. No doubt in the present case, Form-R was used by the applicant to claim refund. It is the very case of the petitioner that they were exempted from payment of such service tax by virtue of circular dated 17-9-2004 and this is not denied by the Department and it is not even denying the nature of construction/services rendered by the petitioner was exempted from to payment of Service Tax. What one has to see is whether the amount paid by petitioner under mistaken notion was payable by the petitioner. Though under Finance Act, 1994 such service tax was payable by virtue of notification, they were not liable to pay, as there was exemption to pay such tax because of the nature of the institution for which they have made construction and rendered services. In other words, if the respondent had not paid those amounts, the authority could not have demanded the petitioner to make such payment. In other words, authority lacked authority to levy and collect such service tax. Incase, the department were to demand such payments, petitioner could have challenged it as unconstitutional and without authority of law. If we look at the converse, we find mere payment of amount, would not authorize the department to regularise such payment. When once the department had no authority to demand service tax from the respondent because of its circular dated 17-9-2004, the payment made by the respondent company would not partake the character of service tax liable to be paid by them. Therefore, mere payment made by the respondent will neither validate the nature of payment nor the nature of transaction. In other words, mere payment of amount would not make it a service tax payable by them. When once there is lack of authority to demand service tax from the respondent company, the department lacks authority to levy and collect such amount. Therefore, it would go beyond their purview to collect such amount. When once there is lack of authority to collect such service tax by the appellant, it would not give them the authority to retain the amount paid by the petitioner, which was initially not payable by them. Therefore, mere nomenclature will not be an embargo on the right of the petitioner to demand refund of payment made by them under mistaken notion. --------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
22.?In the case of Commissioner of Central Excise, Bangalore v. Motorola India Pvt. Limited (supra) the Division Bench of this Court considered similar issue. It was a case where excess amount was paid over duty under Central Excise Act on the direction of the Department. There was an application for refund of amount and the same came to be rejected by the Assistant Commissioner on the ground of lapse of time. It was confirmed by both the Appellate Authority and also the Tribunal. Aggrieved by the order of the Tribunal, revenue came up before the High Court. Their lordships of the Division Bench held that order of the Tribunal to allow the claim on the basis that amount paid by mistake cannot be termed as duty in the said case was justified and therefore applying the law laid down in the decision of Apex Court in the case of India Cements Ltd. v. Collector of Central Excise - 1989 (41) E.L.T. 358, dismissed the appeal.
23.?Now we are faced with a similar situation where the claim of the respondent/assessee is on the ground that they have paid the amount by mistake and therefore they are entitled for the refund of the said amount. If we consider this payment as service tax and duty payable, automatically, Section 11B would be applicable. When once there was no compulsion or duty cast to pay this service tax, the amount of Rs. 1,23,96,948/- paid by petitioner under mistaken notion, would not be a duty or service tax payable in law. Therefore, once it is not payable in law there was no authority for the department to retain such amount. By any stretch of imagination, it will not amount to duty of excise to attract Section 11B. Therefore, it is outside the purview of Section 11B of the Act.
6. In view of the above, time-limit prescribed under Section 11B is not applicable in the instant case. The impugned order of the Commissioner (Appeals) is therefore set-aside.
7. The appeal is allowed with consequential relief.
(Order dictated and pronounced in the open Court) (P.M. Saleem) Member (Technical) .KL 6