Custom, Excise & Service Tax Tribunal
Nhava Sheva India Gateway Terminal Pvt ... vs Commissioner Central Goods And Service ... on 29 October, 2024
1 ST/87410/2018
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
REGIONAL BENCH MUMBAI- COURT NO. 02
Service Tax Appeal No. 87410 of 2018
(Arising out of Order-in-Appeal No. SK/GST
(AuditII)/MUM/31/AppealsRaigad/2018 dated 01.03.2018 passed by
Commissioner of GST (Audit-II), Mumbai)
M/s. Nhava Sheva (India) Gateway Terminal .....Appellant
Pvt. Ltd.
Operation Centre, Sheva, Navi Mumbai,
Maharashtra-400707
Vs.
Commissioner of C.G.ST., Thane .....Respondent
Thane Ranade Road, Navbharat Chambers,
Dadar (West), Mumbai - 400028
Appearance:
Shri Prasad Paranjape, Advocate for the Appellant
Shri Nitin Tagade, Authorized Representative for the Respondent
CORAM:
HON'BLE MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL)
HON'BLE DR. SUVENDU KUMAR PATI, MEMBER (JUDICIAL)
FINAL ORDER NO.A/86664/2024 Dated 29/10/2024
INTERIM ORDER NO. 4/2021
Date of Hearing: 04/03/2021
Date of Decision: 28/06/2021
PER: SANJIV SRIVASTAVA
This appeal is filed against the order in appeal No SK/GST
(AuditII)/MUM/31/AppealsRaigad/2018 dated 01.03.2018 of the
Commissioner (Appeal) of GST (Audit-II), Mumbai. By the impugned
order Commissioner (Appeal) has upheld the communication dated
08.12.2016 made by the Deputy Commissioner, Division-9, Service
Tax - VII, Mumbai returning the refund claim filed by the appellant, by
observing as under-
Service provider M/s ITD Cementation has paid the service tax
to Government of India at Service Tax - 1 Kolkata
Commissionerate;
All the documentation including contact, invoices etc are issued
from place outside the jurisdiction of the Deputy Commissioner;
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The agreement between the service provider and appellant
which is very crucial to the subject transaction stipulates that the
same is immune from the jurisdiction of Indian courts. Only the
court of England and Wales have the jurisdiction over any
dispute to the agreement;
The Service Tax has not been paid by the appellant but by the
service provider at Service Tax - 1 Kolkata Commissionerate;
Thus, there was no payment of service tax done under the
jurisdiction of the Deputy Commissioner into the account of
Service Tax Mumbai - VII Commissionerate;
The relevant notifications and section 103 of the Finance Act and
legal provisions governing the refund matter talks about the
service provider only indicating clearly that not the service
recipient, but the service provider may be allowed to claim
refund. The appellant was not a service provider but service
recipient.
2.1 The Appellants is engaged in providing taxable services and are
registered with the Service Tax authorities for the same.
2.2 They had entered into an agreement with M/s ITD Cementation
for construction work at Nhava Sheva Port. Serial Number 14 of the
Exemption Notification No 25/2012-ST dated 20.06.2012 exempted
construction services pertaining to a port. Thus, no service tax was
paid by their contractor M/s ITD Cementation.
2.3 This exemption was withdrawn by Notification 6/2015-ST dated
01.03.2015. Accordingly, the service provider paid Service Tax for the
service provided after 01.03.2015. Service provider invoiced and
collected the same from the appellants.
2.4 The exemption was again introduced by insertion of clause 14A
vide Notification No 96/2016 dated 01.03.2016 providing retrospective
relief for the construction pertaining to an airport or port carried out
during 01.03.2015 to 29.02.2016 by way of refund.
2.5 Claiming that they had paid the service tax as invoiced by the
service provider, Appellant filed the refund claim as a recipient of
services in the jurisdiction in which they were registered for the
payment of service tax on the taxable services provided by them.
3 ST/87410/2018
2.6 Deputy Commissioner, Division-9, Service Tax - VII, Mumbai,
returned the refund claim to the appellant under letter dated
08.12.2016, observing as stated in para 1, supra.
2.7 The appellant treating this letter as an appealable order,
challenged the same before Commissioner (Appeal), raising the
following questions for his consideration.
Whether in the facts and circumstances of this case, the
service receiver can file a refund claim?
Whether the refund claim of the appellant is filed outside the
jurisdiction?
Whether the action of returning the refund claim by the
Adjudication Authority is proper or otherwise?
2.8 Commissioner (Appeals) in the Order-in-Appeal dated
01.03.2018held as under:
i. Legal positions do not bar the appellant service receiver in
the present case from filing refund claim.
ii. As can be seen from the Manual of Supplementary
Instructions issued by the CBEC, in 2001, even where the
person who has borne the incidence of duty files the refund
claim, he has to file the same to the DC/AC having
jurisdiction over the factory of manufacture mutatis mutandis
may be read as "service provider" who normally pays service
tax).
iii. Commissioner (Appeals) did not find any infirmity with the
order returning of the claim and rejected the appeal.
2.9 Aggrieved by the impugned order, appellants have filed this
appeal before the CESTAT.
2.10 Appellant had filed an Miscellaneous Early Hearing Application in
the matter, which was considered and allowed by the bench vide
Miscellaneous Order No M/85022/2021 dated 27.01.2021
3.1 We have heard Shri Parsad Paranjape, Advocate for the
Appellant and Shri Nitin M Tagade, Joint Commissioner, Authorized
Representative for the revenue.
3.2 Arguing for the appellants learned Counsel made submissions in
support of the appellants claim for the refund, which he summarized in
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the written submissions dated 1st February 2021, 16th March 2021 and
3rd May 2021.
Submissions dated 1st February 2021
Section 103 of the Act which authorised the Appellant to file the
refund claim. It does not mandate filing of the refund only in the
jurisdiction of the service provider.
Commissioner (Appeals) has held that the recipient of service is
eligible to file the refund claim. As natural corollary it is but
obvious that the said claim need not be filed within the
jurisdiction of the service provider, especially in the absence of
any mandate in law.
Section 11B of the Central Excise Act 1944 read with Section 83
of the Act governs the refund claims filed by an assessee.
Section 11B(1) mandates that any person claiming the refund of
any duty/tax may make an application to the Assistant/Deputy
Commissioner. Section 11B permits "any person" to claim the
refund. In other words, it is submitted that the Section 11B does
not prescribe that the refund should be filed only by service
provider and so is the case that the said section does not require
that the claim be filed only in the jurisdiction of service provider.
The Appellant further submits that especially under service tax
law where the concept of centralized registration is in vogue,
insistence of filing the claim at a specific jurisdiction is contrary
to the scheme of the Act.
To support the contention that the refund can be claimed by the
service recipient in his own jurisdiction, the Appellant relies on
the following:
o Fujitsu Consulting Pvt. Ltd., [2016 (41) STR 728 (Tri-
Mumbai)]
o Chambal Fertilisers and Chemical Ltd. [2017 (52) 329 (Tri-
Del)]
o Vit Consultancy Pvt. Ltd. [2018 (9) GSTL 286 (Tri-
Chennai)]
o Devasthan Vibhag [2008 (10) STR 415 (Tri-Del.)]
o Jindal Steel & Power Limited [2016 (42) STR 694 (Tri-
Del.)]
The Ld. Commissioner (Appeals), without any evidence, has only
raised a concern or doubt as to whether the tax which is sought
5 ST/87410/2018
to be refunded is actually paid by the service provider. Section
103, supra, does not prescribe any such condition, hence lower
authorities have gone beyond the mandate of that section. It is
submitted that even when Cenvat credit is claimed by the
recipient of service, he is not required to ensure that the tax is
paid by the service provider. The failure to pay the tax by the
service provider does not debar the service recipient from
claiming the credit of the same. The same should be the
principle for granting refund also. In this regard, the Appellant
relies on the following judgments:
o Tata Motors Ltd., [2013 (294) ELT 394 (Jhar.)]
o Sri. Vinayaga Agencies, [2020 (4) TMI 141 - Madras High
Court]
The Ld. Commissioner (Appeals) has relied on the CBEC Manual -
Chapter 9-Refunds which clarifies the procedure when refund is
claimed by the recipient of goods. It is submitted that the said
manual is not a binding law for the assessee. Secondly, in the
case of manufactured goods, there is no facility of centralized
registration which is present in service tax. Third, the said
instructions do not envisage a case where the claimant is also a
registered assessee with the department. Thus, reliance on the
said instructions does not support Revenue's case.
Without prejudice to the above submission that the Appellant is
entitled to file the refund claim in their own jurisdiction and even
assuming without admitting that the lower authorities are right
in holding that the refund claim ought to have been filed within
the jurisdiction of the service provider, the appropriate approach
for the lower authorities was to transfer the refund application
with the concerned jurisdictional officer instead of returning the
same to the Appellant.
Section 14 of the Limitation Act 1963, that in computing the
period of limitation, time during which the claim was pursued
before the officer with defect of jurisdiction should be excluded.
This view has been upheld by the following decisions
o Anurag Enterprises [ 2019 (369) ELT 1617 (Tri. - All.)]
o Symbio Generics [2019 (369) ELT 972 (Tri.-Chennai)]
o Welspun Tradings Ltd. [ 2018 (363) ELT 710 (Tri. -
Ahmd.)]
o Sahara Power Products [2015 (40) STR 536 (Tri. - Bang.)]
6 ST/87410/2018
Submissions dated 16th March 2021
It is submitted that the Appellant had filed the impugned refund
application in the capacity of a recipient of a taxable service
pursuant to Section 103 of the Finance Act, 1994, inserted with
effect from 14.05.2016.
With insertion of Section 103(1) of the Finance Act, 1994 the
charge of service tax itself is deleted for the services specified
therein by an Act of Parliament. There is no dispute that the
Appellant's services are covered by the said section. Once the
charge itself is deleted, the Appellant no longer remains "the
person liable to pay the service tax" and therefore the question
of assessing the tax does not arise. Sub-Section 2 of Section 103
further mandates that refund shall be made of all such service
tax collected but which would not have been so collected had
sub-section (1) been in force at all material times. Thus, there is
a compulsory and non-discretionary mandate under the law of
the Parliament to refund the service tax, if collected.
The ratio of the ITC judgement (supra) is that the claim for
refund cannot be entertained unless the order of assessment or
self-assessment is modified in accordance with law by taking
recourse to the appropriate proceedings. The refund proceedings
are more or less in the nature of execution proceedings and
hence it is not open to the authority which processes the refund
to make a fresh assessment on merits and to correct assessment
on the basis of mistake or otherwise. (Para 41 and 47 of the ITC
judgement).
When legislature itself has by enacting Section 103 of the
Finance Act, 1994, modified the assessment whether done by
the assessee or by the Revenue taking these services out of
service tax levy that too with retrospective effect. Once the
charge of service tax itself is removed retrospectively by the
legislature, the assessment automatically stands modified to that
effect.
The ratio laid down in the ITC judgement is that the officer
sanctioning refund cannot sit in judgement with the assessment
carried out by another officer. This principle cannot be applied in
such case were the refund is mandated by the act of legislature.
Legislature itself has corrected the assessment and mandated
the refund of tax, if any, collected during the period when the
7 ST/87410/2018
levy existed. Thus, in effect, the principle laid down by the
Hon'ble Supreme Court in the ITC judgement, that refund can be
granted only after assessment is modified is given effect to by
the legislative action of annulling the earlier assessment and
mandating compulsory refund subject to certain conditions.
It is further stated that the present refund application is filed by
the Appellant in the capacity of a recipient of service, as
recipient of service he is not in position to challenge the
assessment made by the service provider while filing his returns.
Section 103 of the Finance Act,1944 was enacted with effect
from 14.05.2016, whereas, the present refund application
pertains to the period April 2015 to February 2016. If the person
seeking refund should have sought modification of assessment
order, the period for doing so i.e. filing appeal, would have been
over for substantial part of the disputed period. Thus, the
interpretation leading to expect performance of impossible has to
be discarded.
The lower authorities have not rejected the refund on the ground
that assessment was not challenged. The lower authorities never
applied ratio of the decisions in case of Flock India and Priya
Blue to reject the refund claim filed by the Appellant.
Appellant first filed their refund application before the Deputy
Commissioner in charge of their own jurisdiction, the same was
returned to them without giving any finding on the acceptance or
rejection of the refund claim. It is submitted that such an action
of return of refund claim filed without due adjudication, is not in
conformity with the law and therefore the Appellant was never
put to notice of any challenge to the assessment and its
consequences on the refund filed by them.
The dispute in the present case is only with respect to the
jurisdiction before whom the Appellant ought to pursue
his refund application. When the Appeal was filed before this
Hon'ble Tribunal the Revenue never filed its reply or cross
objections raising any other ground. Therefore, it is submitted
that it will not be correct for this Hon'ble Tribunal to set up a
new case which was not raised by either side.
With respect to a specific query from the Bench as to whether
the Appellant has claimed input tax credit of service tax charged
by the vendor for which this refund claim is filed as per the
8 ST/87410/2018
Section 103, supra, on instructions, we state that the Appellant
has not claimed the input tax credit of the amount sought to be
refunded. Further, under instructions, we state that the vendor
has paid the service tax to the government treasury and has not
claimed refund of the said amount with his jurisdictional officers
by revising his returns or challenging his assessment.
Submissions dated 3rd May 2021
Tribunal in Service Tax Appeal No. 445 of 2011 - DB
(Ahmedabad), Final Order No. A/11661-11675 dated
27.04.2021 in the case of Cadila Healthcare Ltd. Vs CST,
Ahmedabad held that the ITC decision of the Hon'ble Apex
Court will not be applicable in case of the refund claims filed for
service tax refunds.
3.3 Arguing for the revenue, learned Authorized Representative,
reiterated the discussion and findings as recorded by the
Commissioner (Appeal) in the impugned order, and made his
submissions. He summarized his submissions in the written
submissions filed by him dated 10th March 2021.
Refunds arises as consequence of tax/ duty payment to the
Government Exchequer. Whether such refund is admissible, and
to whom, can be verified by the jurisdictional officers where the
Service Tax was paid as per the then existing law, by the person
required to pay the tax to the Government Exchequer i.e., the
Service Provider.
The Service Tax is paid as per the self-assessment made in ST-3
returns and filed to prescribed jurisdictional officers. The
jurisdictional offices can, based on the ST-3 returns, verify
whether any excess Tax/Duty payment was made, and to what
extent.
In case of M/s ITC Ltd [2019 (368) ELT 216 (SC)] Hon'ble
Supreme Court has held that refund application is not
maintainable in the case where the duty has been paid as per
the assessment order (including self-assessment) which has not
been challenged by way of an appeal before the appropriate
authority, stating as follows:
"41. It is apparent from provisions of refund that it is more or
less in the nature of execution proceedings. It is not open to the
authority which processes the refund to make a fresh
9 ST/87410/2018
assessment on merits and to correct assessment on the basis of
mistake or otherwise.
.......................
47. ............ we are of the opinion that the claim for refund cannot be entertained unless the order of assessment or self- assessment is modified in accordance with law by taking recourse to the appropriate proceedings and it would not be within the ken of Section 27 to set aside the order of self- assessment and reassess the duty for making refund; and in case any person is aggrieved by any order which would include self-assessment, he has to get the order modified under Section 128 or under other relevant provisions of the Act."
The appellants have not brought out whether the self- assessment done by their service provider has been modified on any account including re-assessment, and hence no refund arises as held by Hon'ble Supreme Court in ITC Ltd, supra. Any refund is an outflow from the Government Exchequer and can be made only in the manner prescribed and by the officer having jurisdiction to make such refund. The refund can be made only after proper verification of the following:
o When the service provider was paying the service tax on the service provided, he was eligible to avail the CENVAT credit of duty/ taxes paid on the inputs and inputs services etc., used for providing the output services to the service recipient. Whether service provider has availed and utilized any CENVAT credit of the Service Tax/ duties so paid on the input services and inputs. In case service provider has availed such credit, then the same needs to be reversed/ recovered from the service provider before refund claim can be entertained.
o Whether any Tax Demand-cum-Show Cause Notice has been issued for the relevant period which covers any amount involved in the refund claim can also be better examined by the jurisdictional offices.
All such verifications and cross checks are required to safeguard the Government Revenue and to ensure that there is no double payment or loss of revenue. Due to these reasons, even in the 10 ST/87410/2018 cases where the buyer claims refund, he must do it before the proper officer having jurisdiction where the duty/tax is paid and returns as prescribed filed.
Commissioner (Appeals) has categorically observed that, who can claim refund and the place where refund claim must be filed are two different issues. The refund can be filed by the person who has paid the excess duty/tax because the manufacturer/service provider has already recovered the same from him. Thus, though the refund claim can be filed by two different class or persons, it can be claimed only by one of the two. To ensure that it is not claimed by both, it is necessary that the refund claim whether filed by the service provider or anyone else is filed before the authority in whose jurisdiction such tax/ duty was paid.
Commissioner (Appeals) had distinguished the case laws cited by the appellant. Commissioner (Appeals) as observed that,- o in the case of Jindal Steel & Power Ltd Vs Commissioner referred to in the decision of Chambal Fertilisers &Chemicals Ltd Vs Commissioner of Central Excise, the reason for the findings was that the refund claim was rejected by both the authorities citing jurisdiction. In the case in hand, the claim was not rejected on merits but returned to the appellant for filing before/with appropriate authority, o in the case of Commissioner of Central Excise Pune - I Vs Fujitsu Consulting Pvt Ltd, the issue was rejection of refund because the invoice was addressed to their New Delhi office. The refund application was filed in Pune and duty was also paid in Pune. As such, the ratio of the decision is distinguishable from the case in hand, o in the case of Devasthan Vibhag Vs Commissioner of Central Excise, there was no dispute to the eligibility of refund. The issue was only pertaining to the jurisdiction. Further, appellant had procured a letter from the Additional Accounts Officer observing that the refund is payable to them. In the case on hand, the eligibility of the refund was not decided by the adjudicating authority. It was returned ab-initio for want of jurisdiction. Hence the decision is distinguishable from the case in hand.
11 ST/87410/2018 Commissioner (Appeals) has categorically held in the OIA that though the legal positions do not bar the appellant service receiver in the present case from filing refund claim, the claim needs to be filed before the jurisdiction where such tax/duty payment was made.
Section 103 of the Finance Act, 1994, as inserted by the section 159 of Finance Act, 2016 does not automatically grant refund, but it stipulates certain conditions to be fulfilled for any refund to be granted. Both, the original Adjudicating Authority as well as the first Appellate Authority have not delved on the issue of whether the conditions stipulated in Section 103 have been fulfilled or not, but the moot issue discussed at both levels was that the refund claim ought to have been filed in the jurisdiction where the Service Tax was paid.
It is settled law that any Tax/Duty demand can be made by the jurisdiction where such Tax/Duty is mandated to be paid. Such Tax/Duty demand, in case of erroneously granted refund, if any in this case, can be made only by the jurisdiction where the Tax/Duty was collected and erroneously refunded. The appeal needs to be dismissed as without any merits.
4.1 We have considered the impugned order along with the submissions made in the appeal, during arguments and in the written submissions made by both the sides.
4.2 Appellant has made this application for refund in terms of Section 103 of Finance Act, 1994 as inserted by Section 159 of the Finance Act 2016. The refund claim filed by the Appellants was returned by the Deputy Commissioner, stating that-
The refund claim has been filed by the service recipient, claiming the refund of the service tax paid by the service provider in the jurisdiction elsewhere.
Since the person claiming the refund has not paid any service tax to the government exchequer, he cannot claim this refund. Since the amount claimed as refund has not been paid by the service provider in his jurisdiction, but in the jurisdiction of Commissioner Service Tax Kolkata, where service provider is registered, the refund claim should have been filed before the appropriate authority in that jurisdiction.
12 ST/87410/2018 4.3 This letter dated 08.12.2016 of Deputy Commissioner, returning the refund claim filed by the Appellants, was challenged by the appellants before the Commissioner (Appeal). Considering this letter to be an appealable order, Commissioner (Appeal) admitted the appeal and after hearing the Appellants, he decided the appeal as per the impugned order. By the impugned order, Commissioner (Appeal) agreed with the contentions made by the appellant, vis a vis their eligibility to file this refund claim as recipient of services, but disagreed on the ground of the jurisdiction of the Deputy Commissioner Division 9 Service Tax VII before whom the Appellants have filed the refund claim. In result he dismissed the Appeal filed by the Appellant.
4.4 Revenue has not filed any appeal, or cross objections in the matter challenging that part of the order, which has been decided by the Commissioner (Appeal) in favor of the appellant, i.e., their eligibility to file this refund claim. In absence of any appeal or cross objections filed by the revenue challenging this part of the order, we have no hesitation in agreeing with the submissions made by the counsel for appellant that this cannot be questioned at this stage, while deciding their appeal. Hence without going in that issue, we are proceeding to consider this appeal only on the issue of jurisdiction in which this refund claim should have been filed.
4.5 Thus the only question that is now before us is in respect of the action of the Deputy Commissioner in returning the refund claimed filed by the Appellants, in terms of Section 103 of Finance Act 1994, as inserted by the Section 159 of the Finance Act, 2016, vide his letter dated 08.12.2016. Commissioner (Appeal) has upheld the action of Deputy Commissioner on this account. Appellants have challenged this action, arguing that since the appellant was registered in the jurisdiction of Deputy Commissioner, Division 9, Service Tax VII, thus they had rightly filed the refund claim in the jurisdiction where they were registered for payment of service tax. In support of their contention, they have relied upon various decisions of CESTAT, which are discussed in the para below. In alternate they submit that if Deputy Commissioner, found himself lacking jurisdiction to process this refund claim, he should have transferred the same to the appropriate jurisdictional officer.
13 ST/87410/2018 4.6 Section 103 of Finance Act, 1994 as inserted by the Section 159 of the Finance Act, 2016, is reproduced below, "Section 103 of Finance Act, 1994 as inserted by the Section 159 of Finance Act, 2016
103. (1) Notwithstanding anything contained in section 66B, no service tax shall be levied or collected during the period commencing from the 1st day of April, 2015 and ending with the 29th day of February, 2016 (both days inclusive), in respect of services provided by way of construction, erection, commissioning or installation of original works pertaining to an airport or port, under a contract which had been entered into before the 1st day of March, 2015 and on which appropriate stamp duty, where applicable, had been paid before that date, subject to the condition that Ministry of Civil Aviation or, as the case may be, the Ministry of Shipping in the Government of India certifies that the contract had been entered into before the 1st day of March, 2015.
(2) Refund shall be made of all such service tax which has been collected but which would not have been so collected had sub-section (1) been in force at all material times.
(3) Notwithstanding anything contained in this Chapter, an application for the claim of refund of service tax shall be made within a period of six months from the date on which the Finance Bill, 2016 receives the assent of the President."
This section exempts certain specified services during the period 1st April 2015 to 29th February 2016, subject to fulfilment of certain conditions. It also provides for the refund of the Service Tax, which had been paid on these services during this period, provided the application for the refund of the same is made within six months from the date on which Finance Bill, 2016 received the assent of the President. This section has been considered by the Hon'ble Gujarat High Court, Hon'ble Bombay High Court and the Hon'ble High Court of Madhya Pradesh in the decisions referred here under.
Essar Bulk Terminal Salaya Ltd [2018 (363) ELT 262 (T-Ahd)] affirmed in [2019 (25) GSTL 521 (Guj)] [6.2] It is required to be noted that as such the service in question was subjected to service tax for the period between 01.04.2015 to 29.02.2016 and therefore, the service tax was allowable to be paid 14 ST/87410/2018 during the aforesaid period and in fact the petitioner paid the same which was reimbursed by the petitioner to the service provider. However, by Finance Bill, 2016, section 103 came to be inserted in Finance Act, 2014 and the exemption which was available prior to 01.04.2015 which as such was withdrawn between 01.04.2015 to 29.02.2016 came to be restored retrospectively. However, the very section 103 of the Finance Act, 2014 provided that the assessee shall be entitled to the relief of all such service tax which has been collected but which would not have been so collected on sub-section (1) within force at all material times and it further provided that notwithstanding anything contained in the said Chapter, an application for claim of refund of service tax shall be made within a period of six months from the date on which the Finance Bill, 2016 receives the assent of Hon'ble The President. It is required to be noted that the assent of Hon'ble The President was received on 14.05.2016 and therefore, the application for claim of refund of the service tax was required to be made within a period of six months from 14.05.2016. In the present case admittedly the petitioner submitted the application for claim of refund of the service tax on 28.11.2016 i.e. much after the completion of six months' period from 14.05.2016. Thus, from the aforesaid and considering section 103 of the Finance Act, 2014, it can be seen that a policy decision was taken by the Government to restore exemption retrospectively and allowing the refund of the service tax paid during the period between 01.04.2015 to 29.02.2016, provided the refund application is made within a period of six months from the date on which the Finance Bill, 2016 receives the assent of Hon'ble The President. Therefore, a conditional exemption and conditional refund was provided by policy decision contained in section 103 of the Finance Act, 2014. It cannot be disputed that but for section 103 of the Finance Act, 2014 and the exemption being granted retrospectively, the petitioner could not have as a matter of right claimed such exemption and/or even consequently the refund of the tax paid. As such the Union Government was not under any obligation to provide the exemption retrospectively and that too with refund of the tax already paid. By way of policy decision which was culminated into section 103 of the Finance Act, 2014, such an exemption was provided retrospectively and the refund was provided, however subject to sub- section (3) of section 103 of the Finance Act, 2014.
15 ST/87410/2018 JSW Dharamatari Port Pvt Ltd [2019 (20) GSTL 721 (Bom)] "12. If we analyze Section 103 of the Finance Act, 1994, we may notice that subsection (1) provides that notwithstanding anything contained in Section 66B, no service tax shall be levied or collected during the period from 01.04.2015 to 29.02.2016 in respect of services provided by way of construction, erection, commissioning or installation of original works pertaining to an airport or port under a contract which has been entered into before 01.03.2015. The condition imposed in subsection (1) of Section 103 of the Act is that the Ministry of Civil Aviation or as the case may be, Ministry of Shipping, certifies that the contract had been entered into before 01.03.2015. Subsection (1) of Section 103 thus, while granting exemption from payment of service tax for the past period in respect of contracts which were entered prior to 01.03.2015, made it conditional that the certificate being issued by the concerned Ministry that the contract for such service had been entered before 01.03.2015.
13. Subsection (2) of Section 103 pertains to refund to be granted of the service tax already paid. It provides that the refund shall be made of all such service tax which has been collected but would be refundable under subsection (1). Subsection (3) of Section 103 starts with a nonobstante clause, which provides that notwithstanding anything contained in Section 103, an application for claim of refund of service tax shall be made within a period of six months from the date on which the Finance Bill 2016 receives the assent of the President."
MDP INFRA (India) Pvt Ltd [2019 (29) GSTL 296 (MP)] "14. As regard to substantial question of law at 'B', the said question in given facts of present also does not arise for consideration. The appellant was under legal obligation to deposit the service tax in respect of the service rendered qua non-exempted service. The contentions that it was beyond the control of the appellant to deposit the service tax on exempted service is misconceived. Evidently, the notification No. 12/2012 & 25/2012 ceased to exist w.e.f. 01/04/2015. The exemption was revived by notification dated 01/03/2016. But since it was prospective in effect, the appellant was not entitled for any exemption, which the appellant was aware of and with open mind and eyes deposited the service tax due with interest. It was only by 16 ST/87410/2018 virtue of subsequent legislation the notification was made effective from retrospective date with the stipulations that refund can be claimed within specific time provided. There was thus no ambiguity nor any dispute as would have prevented the appellant from seeking refund within the period of limitation. On these given facts the substantial question at 'B' also does not arise for consideration."
In view of the above decisions and the interpretation made by the Hon'ble High Courts, we are not in position to agree with contention of the appellants to the effect that, with the insertion of Section 103(1) of the Finance Act, 1994 the charge of service tax itself is deleted for the services specified therein by an Act of Parliament and the Appellant no longer remains "the person liable to pay the service tax" and therefore the question of assessing the tax does not arise. Further the argument advanced by the appellants to the effect that Sub-Section 2 of Section 103 further mandates that refund shall be made of all such service tax collected but which would not have been so collected had sub- section (1) been in force at all material times, too has been rejected by the Hon'ble High Courts as is evident from these decisions.
4.7 The jurisdiction to process the refund claim filed under Finance Act, 1994, needs to be determined in terms of Section 83 of Finance Act, 1994 read with Section 11B and 12 E of Central Excise Act, 1944 and Rule 3 of the Service Tax Rules, 1994 read with Rule 3 of Central Excise Rules, 2002. These provisions are reproduced below:
Central Excise Act, 1944 Section 2. Definitions. -
In this Act, unless there is anything repugnant in the subject or context, -
..........
(b) "Central Excise Officer" means the Principal Chief Commissioner of Central Excise, Chief Commissioner of Central Excise, Principal Commissioner of Central Excise, Commissioner of Central Excise, Commissioner of Central Excise (Appeals), Additional Commissioner of Central Excise, Joint Commissioner of Central Excise Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise or any other officer of the Central Excise Department, or any person (including an officer of the State Government) invested by the 17 ST/87410/2018 Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963 (54 of 1963) with any of the powers of a Central Excise Officer under this Act.
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 :
Provided that where .....
Provided further that the limitation of one year shall not apply where any [duty and interest, if any, paid on such duty] has been paid under protest.
2. If, on receipt of any such application, the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise is satisfied that the whole or any part of the duty of excise and interest, if any, paid on such duty paid by the applicant is refundable, he may make an order accordingly and the amount so determined shall be credited to the Fund:
Section 12E. Powers of Central Excise Officers.-
(1) A Central Excise Officer may exercise the powers and discharge the duties conferred or imposed under this Act on any other Central Excise Officer who is subordinate to him.
Central Excise Rules, 2002 RULE 3. Appointment and jurisdiction of Central Excise Officers. -- (1) The Board may, by notification, appoint such person as it thinks fit to be Central Excise Officer to exercise all or any of the powers conferred by or under the Act and these rules.
18 ST/87410/2018 (2) The Board may, by notification, specify the jurisdiction of a Principal Chief Commissioner of Central Excise or Chief Commissioner of Central Excise, as the case may be, Principal Commissioner of Central Excise or Commissioner of Central Excise, as the case may be or Commissioner of Central Excise (Appeals) for the purposes of the Act and the rules made thereunder.
(3) Any Central Excise Officer may exercise the powers and discharge the duties conferred or imposed by or under the Act or these rules on any other Central Excise Officer who is subordinate to him.
Finance Act, 1994 Section 65B.Interpretations. -- In this Chapter, unless the context otherwise requires,--
(55) words and expressions used but not defined in this Chapter and defined in the Central Excise Act, 1944 (1 of 1944) or the rules made thereunder, shall apply, so far as may be, in relation to service tax as they apply in relation to a duty of excise.
SECTION 83. Application of certain provisions of Act 1 of 1944.-- The provisions of the following sections of the Central Excise Act, 1944, as in force from time to time, shall apply, so far as may be, in relation to service tax as they apply in relation to a duty of excise :-
sub-section (2A) of section 5A, sub-section(2) of section 9A, 9AA, 9B, 9C, 9D, 9E, 11B, 11BB, 11C, 12, 12A, 12B, 12C, 12D, 12E, 14, 15, 15A, 15B, 31, 32, 32A to 32P, 33A, 35EE, 34A, 35F, 35FF, to 35O (both inclusive), 35Q, 35R, 36, 36A, 36B, 37A, 37B, 37C, 37D, 38A and 40.
Service Tax Rules, 1994
3. Appointment of officers - The Central Board of Excise and Customs may appoint such Central Excise Officers as it thinks fit for exercising the powers under Chapter V of the Act within such local limits as it may assign to them as also specify the taxable service in relation to which any such Central Excise Officers shall exercise his powers.
4.8 While analyzing the issue of jurisdiction vis a vis the wordings used in Section 28 of the Customs Act, 1962, a three member bench of Hon'ble Supreme Court has in case of Canon India Pvt Ltd [2021- TIOL-123-SC-Cus-LB], held as follows:
19 ST/87410/2018 "9. The question that arises is whether the Directorate of Revenue Intelligence had authority in law to issue a show cause notice under Section 28(4) of the Act for recovery of duties allegedly not levied or paid when the goods have been cleared for import by a Deputy Commissioner of Customs who decided that the goods are exempted. It is necessary that the answer must flow from the power conferred by the statute i.e. under Section 28(4) of the Act. This Section empowers the recovery of duty not paid, part paid or erroneously refunded by reason of collusion or any willful mis-statement or suppression of facts and confers the power of recovery on "the proper officer". The obvious intention is to confer the power to recover such duties not on any proper officer but only on "the proper officer". This Court in Consolidated Coffee Ltd. and Another vs. Coffee Board, Bangalore [1980 (3) has held:-
"14. ...Secondly, and more importantly, the user of the definite article 'the' before the word 'agreement' is, in our view, very significant. Parliament has not said 'an agreement' or 'any agreement' for or in relation to such export and in the context the expression 'the agreement' would refer to that agreement which is implicit in the sale occasioning the export."
In Shri Ishar Alloy Steels Ltd. vs. Jayaswals Neco Ltd. [2001 (3) SCC 809] has held:-
"9. ...'The' is the word used before nouns, with a specifying or particularizing effect as opposed to the indefinite or generalizing force of 'a' or 'an'. It determines what particular thing is meant; that is, what particular thing we are to assume to be meant. 'The' is always mentioned to denote a particular thing or a person."
10. There are only two articles 'a (or an)' and 'the'. `A (or an)' is known as the Indefinite Article because it does not specifically refer to a particular person or thing. On the other hand, 'the' is called the Definite Article because it points out and refers to a particular person or thing. There is no doubt that, if Parliament intended that any proper officer could have exercised power under Section 28 (4), it could have used the word 'any'.
11. Parliament has employed the article "the" not accidently but with the intention to designate the proper officer who had assessed the goods at the time of clearance. It must be clarified that the proper 20 ST/87410/2018 officer need not be the very officer who cleared the goods but may be his successor in office or any other officer authorized to exercise the powers within the same office. In this case, anyone authorized from the Appraisal Group. Assessment is a term which includes determination of the dutiability of any goods and the amount of duty payable with reference to, inter alia, exemption or concession of customs duty vide Section 2 (2) (c) of the Customs Act, 19624 .
12. The nature of the power to recover the duty, not paid or short paid after the goods have been assessed and cleared for import, is broadly a power to review the earlier decision of assessment. Such a power is not inherent in any authority. Indeed, it has been conferred by Section 28 and other related provisions. The power has been so conferred specifically on "the proper officer" which must necessarily mean the proper officer who, in the first instance, assessed and cleared the goods i.e. the Deputy Commissioner Appraisal Group. Indeed, this must be so because no fiscal statute has been shown to us where the power to re-open assessment or recover duties which have escaped assessment has been conferred on an officer other than the officer of the rank of the officer who initially took the decision to assess the goods.
13. Where the statute confers the same power to perform an act on different officers, as in this case, the two officers, especially when they belong to different departments, cannot exercise their powers in the same case. Where one officer has exercised his powers of assessment, the power to order re-assessment must also be exercised by the same officer or his successor and not by another officer of another department though he is designated to be an officer of the same rank. In our view, this would result into an anarchical and unruly operation of a statute which is not contemplated by any canon of construction of statute.
14. It is well known that when a statute directs that the things be done in a certain way, it must be done in that way alone. As in this case, when the statute directs that "the proper officer" can determine duty not levied/not paid, it does not mean any proper officer but that proper officer alone. We find it completely impermissible to allow an officer, who has not passed the original order of assessment, to re- open the assessment on the grounds that the duty was not paid/not levied, by the original officer who had decided to clear the goods and 21 ST/87410/2018 who was competent and authorized to make the assessment. The nature of the power conferred by Section 28 (4) to recover duties which have escaped assessment is in the nature of an administrative review of an act. The section must therefore be construed as conferring the power of such review on the same officer or his successor or any other officer who has been assigned the function of assessment. In other words, an officer who did the assessment, could only undertake re-assessment which is involved in Section 28 (4)."
4.9 We use the same framework to analyze the provisions of Section 11B, in relation to determine the jurisdiction in which the refund claim should have been filed. Relevant part of Section 11 B of Central Excise Act, 1944, which has been made applicable by the Section 83 of Finance Act, 1994, for the refunds in case of Service Tax is reproduced below:
4.10 From the perusal of both sub section 1 and sub section 2 of Section 11 B, it is evident that the phrase "Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise", is preceded by the definite article "the" and not the indefinite articles "a or an".
Referring to the use of definite article, in para 11 and subsequent paras, Hon'ble Apex Court has concluded that the powers vested under Section 28 (4) for re-assessment were to be exercise by the same officer or his successor in office, who had earlier exercised the power of assessment and by no one else. On the same logic we have no hesitation in holding that the phrase "Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise" used in Section 11 B, also refers to the jurisdictional "Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise", with whom the ST-3 returns, in respect of which the refund claim has been made was filed.
4.11 As per the Section 2 (b) of the Central Excise Act, 1944, reproduced above, Assistant/ Deputy Commissioner of Central Excise are Central Excise Officers, whose jurisdiction are specified as per the Rule 3 of the Central Excise Rules, 2002 read with Rule 3 of Service Tax Rules, 1994.
4.12 Notification assigning territorial jurisdiction has been issued by the Central Board of Excise and Customs in terms of the power conferred under Rule 3 of the Central Excise Rules, 2002 has been issued. The preamble to the notification reads as follows:
22 ST/87410/2018 [ TO BE PUBLISHED IN THE GAZETTE OF INDIA , EXTRAORDINARY , PART II , SECTION 3 , SUB-SECTION (i) ] Government of India Ministry of Finance (Department of Revenue ) Notification No. 27 / 2014 - Central Excise (N.T.) New Delhi the 16th September, 2014 G.S.R.(E)..... In exercise of the powers conferred by rule 3 of the Central Excise Rules , 2002 and in supersession of Ministry of Finance (Department of Revenue) notification No. 14/2002-Central Excise (N.T.), dated the 8th March, 2002 , published vide number G.S.R.182(E), dated the 8th March , 2002 , except as respects things done or omitted to be done before such supersession , the Central Board of Excise and Customs hereby specifies in the Tables below , the jurisdiction of the Principal Chief Commissioners of Central Excise as specified in column (3) of the Tables I(A) and I(B) , the jurisdiction of the Chief Commissioners of Central Excise as specified in column (3) of the Tables II(A) and II(B) , the jurisdiction of the Principal Commissioners of Central Excise as specified in column (3) of Table III(A) , the jurisdiction of the Commissioners of Central Excise as specified in column (3) of Table III(B) , the jurisdiction of Commissioners of Central Excise (Appeal) or the Commissioners of Central Excise ( Audit ) as specified in column (3) of Table IV and appoints the officers specified in columns (2) and (3) of Table V and the subordinate officers posted under them as Central Excise Officers having jurisdiction over the Central Excise assessees registered in the territorial jurisdiction of the Principal Commissioners or the Commissioners of Central Excise, as the case may be, specified in column (4) of the said Table, for the purposes of the Central Excise Act, 1944 (1 of 1944) and the rules made there under, namely :-
4.13 Also a notification assigning the territorial jurisdiction in terms of clause (b) of section 2 of the Central Excise Act, 1944 (1 of 1944), read with clause (55) of section 65B of the Finance Act 1994 (32 of 1994), rule 3 of the Central Excise Rule, 2002 and rule 3 of the Service Tax Rules, 1994, has been issued by the Central Board of Excise and Customs. The preamble to the said notification is reproduced below:
[TO BE PUBLISHED IN THE GAZETTE OF INDIA EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)] 23 ST/87410/2018 GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE CENTRAL BOARD OF EXCISE AND CUSTOMS NOTIFICATION No. 20/2014-SERVICE TAX New Delhi, the 16th September, 2014 25 Bhadrapada, 1936 Saka G.S.R (E).- In exercise of the powers conferred by clause (b) of section 2 of the Central Excise Act, 1944 (1 of 1944), read with clause (55) of section 65B of the Finance Act 1994 (32 of 1994), rule 3 of the Central Excise Rule, 2002 and rule 3 of the Service Tax Rules, 1994, the Central Board of Excise and Customs hereby-
(a) appoints, Chief Commissioners of Service Tax, Principal Commissioners of Service Tax, Commissioners of Service Tax, Commissioners of Service Tax (Audit), Commissioners of Central Excise (Audit), Commissioners Large Taxpayer Unit, Commissioners Large Taxpayer Unit (Audit), Commissioner of Central Excise (Appeals) and Commissioners of Service Tax (Appeals) , and all the officers subordinate to such officers, as Central Excise Officers;
(b) vests the officers specified in column (2) of the Tables 1, 2, 3, 4 and 5 and all the officers subordinate to them, with all powers under Chapter V of the Finance Act, 1994 (32 of 1994) and the rules made there under, with respect to the jurisdiction of the officers or the territory, as the case may be, specified in column (3) of the said Tables, namely:-
4.14 When the jurisdiction for exercising specific powers which are conferred upon a Central Excise Officer in terms Central Excise Act, 1944 and for which territorial jurisdiction has been assigned as per the above referred to Notification issued under Rule 3 of Central Excise Rules, 2002, is conferred on any other person then again Central Board of Excise and Customs issues a Notification under Rule 3, conferring such power to specified person in the specified territory.
One such notification, authorizing officers other than Central Excise Officers, for the purpose of receiving the refund claims in specified jurisdictions is reproduced below:
Notification No 30/2007-NT dated 30.07.2007 G.S.R. (E). In exercise of the powers conferred by clause (b) of section 2 of the Central Excise Act, 1944 read with sub-rule (1) rule 3 of the 24 ST/87410/2018 Central Excise Rules, 2002, the Central Board of Excise and Customs appoints the officers specified in column (2) of the table below as Central Excise Officers and invests them with all the powers of Central Excise Officers specified in column (3) of the said table to be exercised within such jurisdiction and for such purposes as specified in columns (4) and (5) of the said table respectively Ser Officer Central Jurisdiction Purpose ial Excise No Officers whose powers are to be exercised (1) (2) (3) (4) (5) 1 Protocol Assistant or New Delhi Receiving of the refund Officer(II), Deputy claims filed by diplomatic Ministry of Commission missions or consulates or External er of Central diplomatic agents or Affairs, New Excise career consular officers Delhi under section 11B of the Act 2 Joint Assistant or Maharashtr Receiving of the refund Secretary Deputy a claims filed by diplomatic (Protocol), Commission missions or consulates or Government er of Central diplomatic agents or of Excise career consular officers Maharashtra under section 11B of the Act 3 Joint Assistant or West Receiving of the refund Secretary Deputy Bengal claims filed by diplomatic (Protocol), Commission missions or consulates or Government er of Central diplomatic agents or of West Excise career consular officers Bengal under section 11B of the Act 4 Joint Assistant or Tamil Nadu Receiving of the refund Secretary Deputy claims filed by diplomatic (Protocol), Commission missions or consulates or Government er of Central diplomatic agents or of Tamil Nadu Excise career consular officers under section 11B of the Act 4.15 From the reading of the above referred provisions of the Acts and Rules and notifications issued thereunder it is quite evident that Central Excise Act, 1944 and Chapter V of Finance Act, 1994 are implemented by specified officers on whom the territorial cum functional jurisdiction, exercise the powers conferred under these statues has been specified. Accordingly Central Board of Excise and Custom (as it was known then), has issued notification vesting such powers to specified officers on territorial cum functional basis. Thus 25 ST/87410/2018 only those officers who have been specified as per these Notifications issued by the Central Board of Excise and Custom can exercise these powers conferred by them in terms of these statues in specified jurisdiction. Above provisions also make it clear that jurisdiction to exercise any power conferred under the Central Excise Act, 1944 or under the Chapter V of Finance Act, 1994 can only be conferred by the Central Board of Excise and Customs and by no other authority including this tribunal. No person seeking any remedy under these statue can claim the remedy sought from any officer but has to approach the specified officer having the jurisdiction to Act in that matter.
4.16 A nine member, Constitutional Bench of Hon'ble Supreme Court, has in case of Mafatlal Industries [1997 (89) ELT 249 (SC)] considered the Section 11 B of Central Excise, 1944 and has observed as follows in para 70:
"70. Re: (II): We may now consider a situation where a manufacturer pays a duty unquestioningly - or he questions the levy but fails before the original authority and keeps quiet. It may also be a case where he files an appeal, the appeal goes against him and he keeps quiet. It may also be a case where he files a second appeal/revision, fails and then keeps quiet. The orders in any of the situations have become final against him. Then what happens is that after an year, five years, ten years, twenty years or even much later, a decision is rendered by a High Court or the Supreme Court in the case of another person holding that duty was not payable or was payable at a lesser rate in such a case. (We must reiterate and emphasize that while dealing with this situation we are keeping out the situation where the provision under which the duty is levied is declared unconstitutional by a court; that is a separate category and the discussion in this paragraph does not include that situation. In other words, we are dealing with a case where the duty was paid on account of mis- construction, mis-application or wrong interpretation of a provision of law, rule, notification or regulation, as the case may be.) Is it open to the manufacturer to say that the decision of a High Court or the Supreme Court, as the ease may be, in the case of another person has made him aware of the mistake of law and, therefore, he is entitled to refund of the duty paid by him? Can he invoke Section 72 of the 26 ST/87410/2018 Contract Act in such a case and claim refund and whether in such a case, it can be held that reading Section 72 of the Contract Act along with Section 17(1)(c) of the Limitation Act, 1963, the period of limitation for making such a claim for refund, whether by way of a suit or by way of a writ petition, is three years from the date of discovery of such mistake of law? Kanhaiyalal is understood as saying that such a course is permissible. Later decisions commencing from Bhailal Bhai have held that the period of limitation in such cases is three years from the date of discovery of the mistake of law. With the greatest respect to the learned Judges who said so, we find ourselves unable to agree with the said proposition. Acceptance of the said proposition would do violence to several well-accepted concepts of law. One of the important principles of law, based upon public policy, is the sanctity attaching to the finality of any proceeding, be it a suit or any other proceeding. Where a duty has been collected under a particular order which has become final, the refund of that duty cannot be claimed unless the order (whether it is an order of assessment, adjudication or any other order under which the duty is paid) is set aside according to law.
So long as that order stands, the duty cannot be recovered back nor can any claim for its refund be entertained. But what is happening now is that the duty which has been paid under a proceeding which has become final long ago - may be an year back, ten years back or even twenty or more years back - is sought to be recovered on the ground of alleged discovery of mistake of law on the basis of a decision of a High Court or the Supreme Court. It is necessary to point out in this behalf that for filing an appeal or for adopting a remedy provided by the Act, the limitation generally prescribed is about three months (little more or less does not matter). But according to the present practice, writs and suits are being filed after lapse of a long number of years and the rule of limitation applicable in that behalf is said to be three years from the date of discovery of mistake of law : The incongruity of the situation needs no emphasis. And all this because another manufacturer or assessee has obtained a decision favorable to him. What has indeed been happening all these years is that just because one or a few of the assessees succeed in having their interpretation or contention accepted by a High Court or the Supreme Court, all the manufacturers/Assessees all over the country are filing refund claims 27 ST/87410/2018 within three years of such decision, irrespective of the fact that they may have paid the duty, say thirty years back, under similar provisions
- and their claims are being allowed by courts. All this is said to be flowing from Article 265 which basis, as we have explained hereinbefore, is totally unsustainable for the reason that the Central Excise Act and the Rules made thereunder including Section 11B/Rule 11 too constitute "law" within the meaning of Article 265 and that in the face of the said provisions - which are exclusive in their nature - no claim for refund is maintainable except under and in accordance therewith. The second basic concept of law which is violated by permitting the above situation is the sanctity of the provisions of the Central Excises and Salt Act itself. The Act provides for levy, assessment, recovery, refund, appeals and all incidental/ancillary matters. Rule 11 and Section 11B, in particular, provide for refund of taxes which have been collected contrary to law, i.e., on account of a mis-interpretation or mis-construction of a provision of law, rule, notification or regulation. The Act provides for both the situations represented by Sections 11A and 11B. As held by a seven - Judge Bench in Kamala Mills, following the principles enunciated in Firm & Illuri Subbaiya Chetty, the words "any assessment made under this Act" are wide enough to cover all assessments made by the appropriate authorities under the Act whether the assessments are correct or not and that the words "an assessment made" cannot mean an assessment properly and correctly made. It was also pointed out in the said decision that the provisions of the Bombay Sales Tax Act clearly indicate that all questions pertaining to the liability of the dealer to pay assessment in respect of their transactions are expressly left to be decided by the appropriate authorities under the Act as matters falling within their jurisdiction. Whether or not a return is correct and whether a transaction is exigible to tax or not are all matters to be determined by the authorities under the Act. The argument that the finding of the authority that a particular transaction is taxable under the Act is a finding on a collateral fact and, therefore, resort to civil court is open, was expressly rejected and it was affirmed that the whole activity of assessment beginning with the filing of the return and ending with the order of assessment falls within the jurisdiction of the authorities under the Act and no part of it can be said to constitute a collateral activity not specifically or expressly included in the jurisdiction of the authorities under the Act. It was 28 ST/87410/2018 clarified that even if the authority under the Act holds erroneously, while exercising its jurisdiction and powers under the Act that a transaction is taxable, it cannot be said that the decision of the authority is without jurisdiction. We respectfully agree with the above propositions and hold that the said principles apply with equal force in the case of both the Central Excises and Salt Act and the Customs Act.
Once this is so, it is un-understandable how an assessment/adjudication made under the Act levying or affirming the duty can be ignored because some years later another view of law is taken by another court in another person's case. Nor is there any provision in the Act for re-opening the concluded proceedings on the aforesaid basis. We must reiterate that the provisions of the Central Excise Act also constitute "law" within the meaning of Article 265 and any collection or retention of tax in accordance or pursuant to the said provisions is collection or retention under "the authority of law" within the meaning of the said article.
In short, no claim for refund is permissible except under and in accordance with Rule 11 and Section 11B. An order or decree of a court does not become ineffective or unenforceable simply because at a later point of time, a different view of law is taken. If this theory is applied universally, it will lead to unimaginable chaos. It is, however, suggested that this result follows only in tax matters because of Article
265. The explanation offered is untenable as demonstrated hereinbefore. As a matter of fact, the situation today is chaotic because of the principles supposedly emerging from Kanhaiyalal and other decisions following it. Every decision of this Court and of the High Courts on a question of law in favor of the assessee is giving rise to a wave of refund claims all over the country in respect of matters which have become final and are closed long number of years ago. We are not shown that such a thing is happening anywhere else in the world. Article 265 surely could not have been meant to provide for this. We are, therefore, of the clear and considered opinion that the theory of mistake of law and the consequent period of limitation of three years from the date of discovery of such mistake of law cannot be invoked by an assessee taking advantage of the decision in another assessee's case. All claims for refund ought to be, and ought to have been, filed only under and in accordance with Rule 11/Section 11B and under no other provision and in no other 29 ST/87410/2018 forum. An assessee must succeed or fail in his own proceedings and the finality of the proceedings in his own case cannot be ignored and refund ordered in his favor just because in another assessee's case, a similar point is decided in favor of the manufacturer/assessee. (See the pertinent observations of Hidayatullah, CJ. in Tilokchand Motichand extracted in Para 37). The decisions of this Court saying to the contrary must be held to have been decided wrongly and are accordingly overruled herewith."
4.17 What has been stated by the Hon'ble Apex Court was reiterated again in subsequent decisions in case of Flock India [2000 (120) ELT 285 (SC)], Priya Blue [2004 (172) ELT 145 (SC)] and ITC Ltd [2019- TIOL-418-SC-CUS-LB].
"35. Section 27 of the Act prior to amendment by Finance Act, 2011 provided for refund procedure. Any person could claim a refund of duty and interest if any paid on such duty. Refund of duty and interest if any paid pursuant to the order of assessment or borne by him, may make an application for refund of such duty to the Assistant Commissioner of Customs or Deputy Commissioner of Customs within one year in the case of any import made by any individual for his personal use or by Government or by any educational, research or charitable institution or hospital. In any other case before the expiry of six months from the date of payment of duty and interest. He has to further satisfy that he has not passed on such liability to any other person. The limitation of one year or six months shall not apply where any duty and interest has been paid under protest. It is made clear by the second proviso to section 27 that in case of refund becomes necessary as a consequence of judgment, decree, order or direction of the appellate authority, Appellate Tribunal or any court, the limitation of one year or six months shall commence from the date of such judgment, decree, order or direction.
36. Section 27 of the Customs Act as amended by Finance Act, 2011 provides that any person claiming refund of any duty or interest paid or borne by him, may make an application in such form and manner as may be prescribed for such refund to the Assistant or Deputy Commissioner of Customs before the expiry of one year from the date of payment of such duty or interest. If an application for refund has been made before Finance Bill received the assent of the President, it is deemed to be filed under the provision of section 27 (1) as existed 30 ST/87410/2018 and to be dealt with under section 27(2). The period of limitation of one year provided by the provisions of section 27 has to be computed in the case of goods which are exempt from payment of duty by a special order issued under section 25(2) from the date of issue of such an order as provided in section 27(1B)(a). Where the duty becomes refundable as a consequence of any judgment, decree, order or direction of the appellate authority, Appellate Tribunal or any Court, the limitation of one year shall be computed from the date of such judgment, decree, order or direction. It is provided in Section 27(1B)(c) that where any duty is paid provisionally under Section 18, the limitation of one year shall be computed from the date of adjustment of duty after the final assessment thereof or in the case of re-assessment, from the date of such re-assessment. The second proviso to section 27 makes it clear that limitation of 1 year shall not apply where any duty or interest has been paid under protest.
37. Under Section 27(2)(a) it is incumbent upon the applicant to satisfy that the amount of duty or interest of which refund has been claimed, had not been passed by him to any other person, the provision aims at preventing unjust enrichment.
38. No doubt about it that the expression which was earlier used in Section 27(1)(i) that "in pursuance of an order of assessment" has been deleted from the amended provision of Section 27 due to introduction of provision as to self- assessment. However, as self-assessment is nonetheless an order of assessment, no difference is made by deletion of aforesaid expression as no separate reasoned assessment order is required to be passed in the case of self-assessment as observed by this Court in Escorts Ltd. v. Union of India & Ors. (supra).
39. In Collector of Central Excise, Kanpur v. Flock (India) Pvt. Ltd.
2000 (120) ELT 285 (SC), the question which came up for consideration before this Court was non-challenge of an appealable order where the adjudicating authority had passed an order which is appealable under the statute, and the party aggrieved did not choose to file an appeal. This Court held that it is not open to the party to question the correctness of the order of the adjudicating authority subsequently by filing a claim for refund on the ground that the adjudicating authority had committed an error in passing the order.
31 ST/87410/2018 The provisions of the Central Excise Act, 1944 came up for consideration. The Court has observed:
"10. Coming to the question that is raised, there is little scope for doubt that in a case where an adjudicating authority has passed an order which is appealable under the statute and the party aggrieved did not choose to exercise the statutory right of filing an appeal, it is not open to the party to question the correctness of the order of the adjudicating authority subsequently by filing a claim for refund on the ground that the adjudicating authority had committed an error in passing its order. If this position is accepted then the provisions for adjudication in the Act and the Rules, the provision for appeal in the Act and the Rules will lose their relevance and the entire exercise will be rendered redundant. This position, in our view, will run counter to the scheme of the Act and will introduce an element of uncertainty in the entire process of levy and collection of excise duty. Such a position cannot be countenanced. The view was taken by us also gains support from the provision in sub-rule (3) of Rule 11 wherein it is laid down that whereas a result of any order passed in appeal or revision under the Act, refund of any duty becomes due to any person, the proper officer may refund the amount to such person without his having to make any claim in that behalf. The provision indicates the importance attached to an order of the appellate or revisional authority under the Act. Therefore, if an order which is appealable under the Act is not challenged then the order is not liable to be questioned and the matter is not to be reopened in a proceeding for the refund which, if we may term it so, is in the nature of execution of a decree/order. In the case at hand, it was specifically mentioned in the order of the Assistant Collector that the assessee may file an appeal against the order before the Collector (Appeals) if so advised."(emphasis supplied)
40. In Priya Blue Industries Ltd. v. Commissioner of Customs (Preventive) 2004 (172) ELT 145 (SC), the Court considered unamended provision of Section 27 of the Customs Act and a similar submission was raised which was rejected by this Court observing that so long as the order of assessment stands, the duty would be payable as per that order of assessment. This Court has observed thus:
"6. We are unable to accept this submission. Just such a contention has been negatived by this Court in Flock (India) case (2000) 6 SCC 650 = 2002-TIOL-208-SC-CX. Once an order of assessment is passed
32 ST/87410/2018 the duty would be payable as per that order. Unless that order of assessment has been reviewed under Section 28 and/or modified in an appeal, that order stands. So long as the order of assessment stands the duty would be payable as per that order of assessment. A refund claim is not an appeal proceeding. The officer considering a refund claim cannot sit in appeal over an assessment made by a competent officer. The officer considering the refund claim cannot also review an assessment order.
7. We also see no substance in the contention that provision for a period of limitation indicates that a refund claim could be filed without filing an appeal. Even under Section 11 under the Excise Act, the claim for refund had to be filed within a period of six months. It was still held, in Flock (India)'s case (supra), that in the absence of an appeal having been filed no refund claim could be made.
8. The words "in pursuance of an order of assessment" only indicate the party/person who can make a claim for refund. In other words, they enable a person who has paid duty in pursuance of an order of assessment to claim the refund. These words do not lead to the conclusion that without the order of assessment having been modified in appeal or reviewed a claim for refund can be maintained."(emphasis supplied)
41. It is apparent from provisions of refund that it is more or less in the nature of execution proceedings. It is not open to the authority which processes the refund to make a fresh assessment on merits and to correct assessment on the basis of mistake or otherwise.
42. It was contended that no appeal lies against the order of self- assessment. The provisions of Section 128 deal with appeals to the Commissioner (Appeals). Any person aggrieved by any decision or order may appeal to the Commissioner (Appeals) within 60 days. There is a provision for condonation of delay for another 30 days. The provisions of Section 128 are extracted hereunder:
"128. Appeals to [Commissioner (Appeals)]. - - - (1) Any person aggrieved by any decision or order passed under this Act by an officer of customs lower in rank than a [Principal Commissioner of Customs or Commissioner of Customs] may appeal to the [Commissioner (Appeals)] [within sixty days] from the date of the communication to him of such decision or order:
33 ST/87410/2018 [Provided that the Commissioner (Appeals) may, if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of sixty days, allow it to be presented within a further period of thirty days.] [(1A) The Commissioner (Appeals) may, if sufficient cause is shown, at any stage of hearing of an appeal, grant time, from time to time, to the parties or any of them and adjourn the hearing of the appeal for reasons to be recorded in writing: Provided that no such adjournment shall be granted more than three times to a party during hearing of the appeal.] (2) Every appeal under this section shall be in such form and shall be verified in such manner as may be specified by rules made in this behalf."
43. As the order of self-assessment is nonetheless an assessment order passed under the Act, obviously it would be appealable by any person aggrieved thereby. The expression 'Any person' is of wider amplitude. The revenue, as well as assessee, can also prefer an appeal aggrieved by an order of assessment. It is not only the order of re- assessment which is appealable but the provisions of Section 128 make appealable any decision or order under the Act including that of self-assessment. The order of self-assessment is an order of assessment as per section 2(2), as such, it is appealable in case any person is aggrieved by it. There is a specific provision made in Section 17 to pass a reasoned/speaking order in the situation in case on verification, self-assessment is not found to be satisfactory, an order of re-assessment has to be passed under section 17(4). Section 128 has not provided for an appeal against a speaking order but against "any order" which is of wide amplitude. The reasoning employed by the High Court is that since there is no lis, no speaking order is passed, as such an appeal would not lie, is not sustainable in law, is contrary to what has been held by this Court in Escorts (supra).
44. The provisions under section 27 cannot be invoked in the absence of amendment or modification having been made in the bill of entry on the basis of which self-assessment has been made. In other words, the order of self-assessment is required to be followed unless modified before the claim for refund is entertained under Section 27. The refund proceedings are in the nature of execution for refunding amount. It is not assessment or re-assessment proceedings at all. Apart from that, 34 ST/87410/2018 there are other conditions which are to be satisfied for claiming exemption, as provided in the exemption notification. Existence of those exigencies is also to be proved which cannot be adjudicated within the scope of provisions as to refund. While processing a refund application, re-assessment is not permitted nor conditions of exemption can be adjudicated. re-assessment is permitted only under Section 17(3)(4) and (5) of the amended provisions. Similar was the position prior to the amendment. It will virtually amount to an order of assessment or re-assessment in case the Assistant Commissioner or Deputy Commissioner of Customs while dealing with refund application is permitted to adjudicate upon the entire issue which cannot be done in the ken of the refund provisions under Section 27. In Hero Cycles Ltd. v. Union of India 2009 (240) ELT 490 (Bom.) = 2009-TIOL-317- HC-MUM-CUS though the High Court interfered to direct the entertainment of refund application of the duty paid under the mistake of law. However, it was observed that amendment to the original order of assessment is necessary as the relief for a refund of claim is not available as held by this Court in Priya Blue Industries Ltd. (supra).
45. Reliance was also placed on a decision of Rajasthan High Court with respect to service tax in Central Office Mewar Palace Org. v. Union of India 2008 (12) STR 545 (Raj.). In view of the aforesaid discussion, we are not inclined to accept the reasoning adopted by the High Court, that too is also not under the provisions of the Customs Act.
46. The decision in Intex Technologies (India) Ltd. v. Union of India has followed Micromax (supra). The reasoning employed by the High Courts of Delhi and Madras does not appear to be sound. The scope of the provisions of refund under Section 27 cannot be enlarged. It has to be read with the provisions of Sections 17, 18, 28 and 128.
47. When we consider the overall effect of the provisions prior to amendment and post-amendment under Finance Act, 2011, we are of the opinion that the claim for refund cannot be entertained unless the order of assessment or self-assessment is modified in accordance with law by taking recourse to the appropriate proceedings and it would not be within the ken of Section 27 to set aside the order of self- assessment and reassess the duty for making refund; and in case any person is aggrieved by any order which would include self-assessment, 35 ST/87410/2018 he has to get the order modified under Section 128 or under other relevant provisions of the Act."
4.18 Appellants have relying on the recent decision of Ahmedabad Bench in case of Cadila Healthcare Ltd argued that the decision in case of ITC Ltd, supra was in respect of self assessment of Bill of Entry, and shall not be applicable to the facts of present case as in the case of Customs there is an order made under Section 47 (2) of the Customs Act, 1962 for the clearance of goods by the proper officer. The relevant paragraph making such observation in this order of Ahmedabad bench is reproduced below:
"4.6 Revenue have strongly argued that appellant's refund is not maintainable on the ground that the self assessment of Service Tax payment has not been challenged by filing appeal before the Commissioner(Appeals). In this regard, he relied upon various judgments as cited in the submission of the learned Authorised Representative above. The Revenue has mainly relied upon the Larger Bench judgment of the Hon'ble Supreme Court in the case of ITC Ltd. (supra). On careful reading of the said judgment, we find that the issue involved in the ITC case is that whether non filing of appeal against assessed Bills of entry will deprive the importer's right to file a refund claim under Section27 of the Customs Act, 1962. In the Customs matter, the appellant needs to file appeal against any decision or order passed by the officer of Custom lower in the rank than the Principal Commissioner of Customs or Commissioner of Customs. An appeal can be filed before the Commissioner (Appeals) in terms of section 128 of the Customs Act. Unlike Service Tax, in customs even though self assessment is done by the assessee, but the same is verified and allowed the clearances by the Custom officer on the Bills of Entry. It is that Bills of entry which is treated as order of assessment and any aggrieved person can file appeal against such assessment order of Bills of entry. In the Service Tax matter, the assessee simply file the ST-3 return and no order is passed by the departmental officer which can be challenged by way of filing appeal before the Commissioner (Appeals). The appeal provision of the Service Tax matter is provided under section 85 of the Finance Act, 1994 which is reproduced below:
"Appeals to the Commissioner of Central Excise (Appeals).--
36 ST/87410/2018 85 (1) Any person aggrieved by any decision or order passed by an adjudicating authority subordinate to the Principal Commissioner of Central Excise or Commissioner of Central Excise may appeal to the Commissioner of Central Excise (Appeals).
4.7 As per the plain reading of the above section 85(1), it provides for filing an appeal before the Commissioner (Appeals) only in case an order is passed by an officer below the rank of Principal Commissioner or Commissioner of Central Excise. In the case of self assessment of Service Tax, there is no order of assessment passed by any officer below the rank of Principal Commissioner or Commissioner of Central Excise. Therefore, there is no provision corresponding to section 47(2) of Customs Act, 1962 in the Finance Act, 1994. Therefore, there is a clear distinction between the assessment under Customs and Service tax. Therefore, ratio of ITC Ltd. case cannot be applied in the matter of Service Tax. We have also noticed that Hon'ble Supreme Court in the ITC case also considered the case of Central Excise duty where the assessments were provisional. In that case, final assessment order was also passed. The assessee paid the amount so demanded. The assessee not being aware of the particular benefit of notification at the time of finalisation of assessment does not claim it. He did not appeal against a speaking order finalizing provisional assessment and the assessee filed refund claim under section11(b) of Central Excise Act, 1952 in respect of duty so paid. It is that refund claim which was rejected by the Supreme Court as not maintainable without challenging the order of final assessment. In these peculiar facts of the case, the Hon'ble Supreme Court has observed that instead of filing the refund claim, the proper remedy was to file the appeal. However, in the present case, there is no order of final assessment by the Service Tax authorities. Therefore, the reliance cannot be placed on case of ITC (supra).
5. We also observed that the judgment of Hon'ble Rajasthan High Court in the case of Central Office of Mewar Palace Org. Versus Union of India (supra) has been expressly approved by the Hon'ble Supreme Court in the case of ITC Ltd. (supra) as the Hon'ble Supreme Court stated that High Court judgment is not under provisions of the Customs Act. Therefore, unlike Customs, there is no express provision to file appeal against the self assessment of service tax by filingST-3 37 ST/87410/2018 return. Therefore, on the ground that appeal against the self assessment was not filed, the refund claim cannot be rejected."
4.19 What has been stated by the Ahmedabad in para 5, is expressly contrary to para 45 of the decision of Hon'ble Apex Court in case of ITC, wherein court expressed its disagreement with the reasoning adopted by the Hon'ble Rajasthan High Court stating, "In view of the aforesaid discussion, we are not inclined to accept the reasoning adopted by the High Court, that too is also not under the provisions of the Customs Act."The reasoning adopted by the Hon'ble High Court and disagreed to by the Hon'ble Apex Court, is reproduced below:
"At the outset, it may be observed, that under the scheme of things, starting from Section 73 onwards it is clear, that the assessee himself is to deposit service tax in form ST-3, there is no provision for assessment. Passing of assessment order is contemplated only in cases where the notice is issued under Section 73, and it is found, that service tax is not levied or paid, or has been short levied or short paid etc. In that view of the matter, the very basis/reasonings given by the learned Tribunal, simply have no legs to stand. Admittedly, the appeal under Section 85 lies against a specific order of the concerned authority in Form ST-4, which requires to disclose, designation and address of the officer passing the decision or order appealed against, and the date of decision or order, so also the date of communication of the decision or order appealed against to the appellant. Admittedly, when no order capable of being appealed against, had ever been passed, it cannot be said that the assessee could file appeal against the assessment order, and not having so filed appeal he cannot lay the claim of refund. Thus, the order of the Tribunal cannot sustain."
What has been stated in para 45, by the Hon'ble Apex Court in case of ITC Ltd., is nothing but the rejection of the above reasoning adopted by the High Court in the cases of Service Tax, which admittedly are not the cases under the Customs Act, 1962. The natural implication of the said observation is extension of the reasoning adopted by the Hon'ble Apex Court to the matters beyond the cases under Customs Act, 1962, specifically under Chapter V of Finance Act, 1994.
4.20 In para 47, Hon'ble Apex Court disagrees with the reasoning adopted by the Delhi High Court in case of Micromax [2016-TIOL-978- HC-Cus], which is also reproduced as follows;
38 ST/87410/2018 "13. As far as the present case is concerned, there was indeed no assessment order as such passed by the customs authorities. Although under Section 2 (ii) of the Act, the word 'assessment' includes a self- assessment, the clearance of the goods upon filing of the B/E and payment of duty is not per se an 'assessment order' in the context of Section 27 (1) (i) as it stood prior to 8th April 2011, particularly if such duty has not been paid under protest. In any event, after 8th April 2011, as noticed hereinbefore, as long as customs duty or interest has been paid or borne by a person, a claim for refund made by such person under Section 27 (1) of the Act as it now stands, will have to be entertained and an order passed thereon by the authority concerned even where an order of assessment may not have reviewed or modified in appeal."
4.21 Even before the decision of Ahmedabad Bench of CESTAT, Mumbai bench had already decided the case of Service Tax Refund by applying the ratio of the decision of ITC Ltd., case [Refer Karanja Terminal and Logistics Pvt Ltd 2021-TIOL-76-CESTAT-MUM]. In our view the decision rendered by the Hon'ble Apex Court in case of ITC Ltd., is applicable to all the refund claims, filed under the provisions of,-
Section 27 of the Customs Act, 1962;
Section 11 B of Central Excise Act, 1944; and Section 83 of Finance Act, 1994 read with Section 11 B of Central Excise Act, 1944.
4.22 In the present case we are not concerned with the case of rejection of refund. Hence in our discussions the reference to these decisions in per se, not to suggest the rejection of the refund claims on the ground of non filing of appeal against the assessment done. We have referred to these decisions to establish integral connection between the processing of the refund claim and the assessment made for payment of duty/ tax in the prescribed manner at the prescribed documents. As per the decisions rendered by the Hon'ble Apex Court in the cases starting from Mafatlal Industries to that ITC Ltd., it is evident that refund of tax/ duty is integral part of the assessment made and cannot be examined/ processed in vacuum, separately. In light of such a view that emerges it is not difficult to hold that only that officer who had assessed or could have assessed the returns filed 39 ST/87410/2018 by the assessee initially, is only empowered under Section 11B to process the refund claims filed by any person, in respect of those return.
4.22 In a series of decisions various courts and tribunal have held that, while examining the admissibility of CENVAT Credit to the recipient of services/ purchaser of goods, the officer so examining cannot question the assessment made at the time of provision of services or the sale of goods. Some of the decisions are as follows:
Kerala State Electronics Corporation [1996 (14) RLT 129 (T)] MDS Switchgear [2008 (229) ELT 485 (SC)] Ajinkya Enterprises [2012-TIOL-578-HC-MUM-CX] In case of Ajinkya Enterprises, Hon'ble Bombay High Court stated the principle of law as follow:
"10. Apart from the above, in the present case, the assessment on decoiled HR / CR coils cleared from the factory of the assessee on payment of duty has neither been reversed nor it is held that the assessee is entitled to refund of duty paid at the time of clearing the decoiled HR / CR coils. In these circumstances, the CESTAT following its decision in the case of Ashok Enterprises 2008( 221) ELT 586 (T), Super Forgings 2007 (217) ELT 559 (T), S.A.I.L. 2007 (220) ELT 520 (T), M.P. Telelinks Limited 2004 (178) ELT 167 (T) and a decision of the Gujarat High Court in the case of CCE V/s. Creative Enterprises reported in 2009 (235) ELT 785 (Guj) has held that once the duty on final products has been accepted by the department, CENVAT credit availed need not be reversed even if the activity does not amount to manufacture. Admittedly, similar view taken by the Gujarat High Court in the case of Creative Enterprises has been upheld by the Apex Court (see 2009 (243) E.L.T. A121) by dismissing the SLP filed by the Revenue."
4.23 If the principles as stated in the above decisions is applied to the present facts then also without questioning/ modifying the self assessment made by the service provider in jurisdiction of the Kolkata Service Tax, no refund can be made to any person even if is admissible as per Section 103 of the Finance Act, 1994. Since the ST-3 returns making self assessment for the payment of Service Tax, were filed by the concerned service provider in the jurisdiction of the Commissioner Service Tax Kolkata therefore only that Assistant/ 40 ST/87410/2018 Deputy Commissioner can have jurisdiction to process the refund claims, if the same were filed by any person claiming that refund.
4.24 It is settled principle in law that any exemption from tax is an exception and need to be claimed by the person who wish to avail the benefit of this exemption. The benefit of exemption needs to be claimed by the concerned person in the manner as provided in law. A five member constitutional bench of Hon'ble Apex Court, in case of Hari Chand Shri Gopal [2010 (260) E.L.T. 3 (S.C.)] held as follows:
"22. The law is well settled that a person who claims exemption or concession has to establish that he is entitled to that exemption or concession. A provision providing for an exemption, concession or exception, as the case may be, has to be construed strictly with certain exceptions depending upon the settings on which the provision has been placed in the Statute and the object and purpose to be achieved. If exemption is available on complying with certain conditions, the conditions have to be complied with. The mandatory requirements of those conditions must be obeyed or fulfilled exactly, though at times, some latitude can be shown, if there is a failure to comply with some requirements which are directory in nature, the non-compliance of which would not affect the essence or substance of the notification granting exemption. In Novopan Indian Ltd. (supra), this Court held that a person, invoking an exception or exemption provisions, to relieve him of tax liability must establish clearly that he is covered by the said provisions and, in case of doubt or ambiguity, the benefit of it must go to the State. A Constitution Bench of this Court in Hansraj Gordhandas v. H.H. Dave (1996) 2 SCR 253, held that such a notification has to be interpreted in the light of the words employed by it and not on any other basis. This was so held in the context of the principle that in a taxing statute, there is no room for any intendment, that regard must be had to the clear meaning of the words and that the matter should be governed wholly by the language of the notification, i.e., by the plain terms of the exemption.
23. Of course, some of the provisions of an exemption notification may be directory in nature and some are of mandatory in nature. A distinction between provisions of statute which are of substantive character and were built in with certain specific objectives of policy, on the one hand, and those which are merely procedural and technical in 41 ST/87410/2018 their nature, on the other, must be kept clearly distinguished. In Tata Iron and Steel Co. Ltd. (supra), this Court held that the principles as regard construction of an exemption notification are no longer res integra; whereas the eligibility clause in relation to an exemption notification is given strict meaning wherefor the notification has to be interpreted in terms of its language, once an assessee satisfies the eligibility clause, the exemption clause therein may be construed literally. An eligibility criteria, therefore, deserves a strict construction, although construction of a condition thereof may be given a liberal meaning if the same is directory in nature.
DOCTRINE OF SUBSTANTIAL COMPLIANCE AND `INTENDED USE':
24. The doctrine of substantial compliance is a judicial invention, equitable in nature, designed to avoid hardship in cases where a party does all that can reasonably expected of it, but failed or faulted in some minor or inconsequent aspects which cannot be described as the "essence" or the "substance" of the requirements. Like the concept of "reasonableness", the acceptance or otherwise of a plea of "substantial compliance" depends upon the facts and circumstances of each case and the purpose and object to be achieved and the context of the prerequisites which are essential to achieve the object and purpose of the rule or the regulation. Such a defence cannot be pleaded if a clear statutory prerequisite which effectuates the object and the purpose of the statute has not been met. Certainly, it means that the Court should determine whether the statute has been followed sufficiently so as to carry out the intent for which the statute was enacted and not a mirror image type of strict compliance. Substantial compliance means "actual compliance in respect to the substance essential to every reasonable objective of the statute" and the court should determine whether the statute has been followed sufficiently so as to carry out the intent of the statute and accomplish the reasonable objectives for which it was passed. Fiscal statute generally seeks to preserve the need to comply strictly with regulatory requirements that are important, especially when a party seeks the benefits of an exemption clause that are important. Substantial compliance of an enactment is insisted, where mandatory and directory requirements are lumped together, for in such a case, if mandatory requirements are complied with, it will be proper to say that the enactment has been substantially 42 ST/87410/2018 complied with notwithstanding the non- compliance of directory requirements. In cases where substantial compliance has been found, there has been actual compliance with the statute, albeit procedurally faulty. The doctrine of substantial compliance seeks to preserve the need to comply strictly with the conditions or requirements that are important to invoke a tax or duty exemption and to forgive non-
compliance for either unimportant and tangential requirements or requirements that are so confusingly or incorrectly written that an earnest effort at compliance should be accepted. The test for determining the applicability of the substantial compliance doctrine has been the subject of a myriad of cases and quite often, the critical question to be examined is whether the requirements relate to the "substance" or "essence" of the statute, if so, strict adherence to those requirements is a precondition to give effect to that doctrine. On the other hand, if the requirements are procedural or directory in that they are not of the "essence" of the thing to be done but are given with a view to the orderly conduct of business, they may be fulfilled by substantial, if not strict compliance. In other words, a mere attempted compliance may not be sufficient, but actual compliance of those factors which are considered as essential.
25. The details to be furnished in Form No. 1 as per Rule 192 and the declaration to be made, relate to the "substance" and "essence" of Chapter X. R-2 Registration Certificate is also pre-requisite to obtain CT2 Certificate. Further, the execution of bonds as provided in that chapter is also not an empty formality for obtaining the duty free excisable goods. Bonds also insist for a declaration. CT-2 Certificate will be issued only if a party gets registered under Form R-2 from the Registering Authority. Only if CT-2 Certificate is obtained, the excisable goods could be removed. Form RG16 Register and the details to be furnished in Form RT11 are also statutory in nature, which relate to the "substance" and "essence" of the requirements under Chapter X. Indisputedly, those requirements had not been complied with.
26. The respondents have laid great emphasis on maintenance of some statutory registers and filing of periodical returns at the recipient unit, so as to take the shelter under the doctrine of substantial compliance for remission of duty. Respondents pointed out that they had identical columns in the registers kept at the recipient end, hence, 43 ST/87410/2018 the requirement of maintaining separate register at the supplier end and the requirements of Chapter X was substantially complied with. It may be noted that RG-16 Register prescribed was specific to Chapter X with the sole intention of maintaining separate accounts for receipt, issue and usage of duty free remitted inputs received from the supplier unit. Similarity of columns and the details furnished therein cannot be considered as substitute for not maintaining of RG-16 Register or other registers for remission of duty under Chapter X.
27. We have already indicated that, at the supplier end, no registration under Rule 174 was obtained and no records were kept. The applicants, at the recipient end, were also legally obliged to give various declarations in the statutory forms so as to claim exemption and such declarations admittedly were not made. Non-compliance of those conditions enumerated under various rules in Chapter X of the Excise Rules and non-furnishing of various statutory forms prescribed under Chapter X, in our view, are fatal to a plea of substantial compliance and intended use. The respondents, therefore, on the facts of this case, have not succeeded in establishing the plea of "intended use" or "the substantial compliance" of the procedure set out in Chapter X so as to claim the benefit of the exemption notification dated 11.8.1994."
4.25 Admittedly during the period 1st day of April, 2015 and ending with the 29th day of February, 2016 (both days inclusive), the Service Provider who had paid the Service Tax in respect of the services, which were subsequently exempted as per the inserted Section 103 of the Finance Act, 1994, would be operating under the CENVAT Credit Scheme as per the CENVAT Credit Rules, 2004. Since these services have been subsequently exempted as per Section 103, the service provider could claim the benefit of this exemption only on complying with Rule 6 of the CENVAT Credit Rules, 2004, which lays down the procedure to be followed by the person providing both taxable and exempted services. To put it in simpler words, even if the services were exempted during the material period in normal manner and not by legislation for the past period, then also if the Service Provider would have claimed the benefit of this exemption, then also he would have complied with the requirements of Rule 6. The retrospective exemption granted by Section 103 do not waive of this requirement. Since it is the Service Provider who has to claim the benefit of this 44 ST/87410/2018 exemption notification he has to show that conditions of Rule 6 are complied with. Since the benefit of this exemption notification is to available only subject to compliance with the requirements of Rule 6 the admissibility of this exemption can only be considered and adjudicated by the jurisdictional officers were the service provider is registered. Appellant have in their submissions submitted that their refund claim should e considered and allowed and if any proceedings are to be initiated against the service provider they can be initiated separately at the Service Provider end. We are not in position to agree with the said submissions of the appellant, in view of the decision of Hon'ble Apex Court in case of Hari Chand Shri Gopal, supra. Further the Service Provider independently cannot be faulted if he has paid the service tax as applicable without availing the benefit of this exemption, without adhering to the Rule 6. Admissibility of an exemption under a taxing statue needs to be determined qua the person making the payment of tax to the exchequer and not qua the purchaser/ recipient of goods/ services.
4.26 If the Service Provider has paid the Service Tax even in respect of the goods subsequently exempted by way of Section 103, the appellants are/ were entitled to take CENVAT Credit of the Service Tax paid. If they have availed the credit the same could not have been questioned in view of the decision of Hon'ble Bombay High Court in case of Anjikya Enterprises, supra. The jurisdictional authorities with whom the appellants is registered without an iota of doubt are concerned with the CENVAT Credit of the tax paid, and any dispute or benefit associated with the same needs to be claimed from them only. By way of this application claiming refund, appellant are seeking to encash the CENVAT Credit that is available to them which is not permissible as per the provisions of Chapter V of Finance Act, 1994 and the CENVAT Credit Rules, 2004.
4.26 By reading of the Section 11B of the Central Excise Act, 1944, it is quite evident that any person who is claiming refund of any amount paid by him as duty/ tax or interest thereon is required to file the refund claim with "the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise". The issue for consideration is whether the manner in which this section exists will permit the claimant to file the refund claim with any Assistant/ Deputy Commissioner of Central Excise or the claim is to be filed before the 45 ST/87410/2018 specific and specified Assistant/ Deputy Commissioner of Central Excise. Appellant has relying upon certain judgements argued that they are justified in filing this refund claim as service recipient before the Assistant/ Deputy Commissioner of Central Excise, in the jurisdiction which they are registered, even if they are claiming the refund of amount paid by the service provider registered in jurisdiction elsewhere. They rely on the decision of Tribunal in the case of Chambal Fertilizers wherein the tribunal has observed "6. There is no provision exist in Section 11B ibid, limiting the filing of refund claim either in Commissionerate having jurisdiction over service provider or that having jurisdiction over service recipient. In such a case, the appellant is entitled to file refund application before any of these authorities. In this regard, the Tribunal in the case of Jindal Steel & Power Limited (supra) has held as under:- ......".
4.27 Learned Commissioner (Appeal) has relied upon the CBEC Manual of Supplementary Instructions, Chapter 9 Refunds, which states as follows, for rejecting their arguments.
"1.1 Refund of any duty of excise is governed by Section 11B of the Central Excise Act, 1944. By definition, refund includes rebate of duty paid on goods exported out of India or on materials used in the manufacture of goods exported out of India. The refund claim can be filed within one year from the relevant date in the specified Form [for the time being the format R-1 specified under rule 173S of the erstwhile Central Excise Rules, 1944] by an assessee or even a person who has borne the duty incidence, to the Deputy/Assistant Commissioner of Central Excise having jurisdiction over the factory of manufacture."
4.28 The issue under consideration before the Tribunal in the case of Indian Farmer Fertilizer Cooperative Ltd [2014-TIOL-118-CESTAT- DEL], was in respect of the admissibility of the refund claim filed by the service recipient. The tribunal has decided the issue following the decision of Hon'ble Apex Court in case of Mafatlal Industries [1987 (89) ELT 247 (SC)] para 90, held that refund claim filed by the service recipient is admissible. The relevant paragraphs from that decision are reproduced below:
"4. The appellant initially applied for refund to the service tax authorities at Navi Mumbai. By the order dated 05.04.2011, the 46 ST/87410/2018 Assistant Commissioner, Service Tax Division-V rejected the refund claim on the ground that the application for refund should be made before the Commissionerate within whose jurisdiction the applicant operates, on the principle that the person who has borne the incidence of duty was required to file a refund claim, before its jurisdictional officer.
5. Thereafter the claim for refund application was preferred before the Assistant Commissioner, Bareilly. By the order dated 23.12.2011 the Assistant Commissioner, Bareilly sanctioned the refund as sought. Revenue preferred an appeal which was allowed by the Commissioner (Appeals), Meerut by the impugned order dated 16.04.2012. The appellate Commissioner reversed the order of the adjudicating authority on the singular ground that the refund claim was filed by the recipient of the service and not the provider M/s RGTIL; and that the word 'any person" in Section 11B of the 1944 Act does not include the recipient of a service, on whom the burden of remittance of service tax does not fall under the provisions of the Act. The decision of the Supreme Court in Mafatlal Industries Ltd. vs. Union of India - 1997 (89) ELT 247 (SC), relied upon by the appellant to support its claim for refund was brushed aside by the appellate authority by simply observing that the facts and circumstances of the Mafatlal case were different from the facts and circumstances presented by the appellant.
6. The Constitution Bench in Mafatlal Industries at paragraph 90 and in the summary of its conclusions in paragraph 99 (xii) clearly spelt out the scope of Section 11B of the 1944 Act and ruled that Section 11B does provide for a purchaser presenting a claim for refund, provided he is able to establish that he has not passed on the burden to another person. In VST Precision Components Ltd. vs. CCE, Bangalore-II - 2003 (157) ELT 493 (Tri. Bang.), this Tribunal referred to the decision of Ferrous Engineering v. Collector- 1998 (100) ELT 494 (Tribunal) to hold that a customer is also entitled for refund.
7. Consequently the appellant herein who is a recipient of the taxable service provided by the RGTIL and had borne the burden of service tax is entitled to claim refund, consequent on the downward revision of the charges payable by the appellant to RGTIL in terms of the determination of the appropriate rate of charge, by the Regulatory Board, and the excess quantum of Service Tax remitted as a consequence.
47 ST/87410/2018
8. We find that the order of the Commissioner (Appeals), in brushing aside the contention of the petitioner to support its claim for refund by reference to the law declared by the Constitution Bench in Mafatlal Industries, is perverse and in total non-application of mind. The ld. Commissioner (Appeals) distinguished the clearly applicable law declared in Mafatlal Industries, as to the scope of Section 11B of the 1944 Act, without any analysis whatsoever of either the facts, the circumstances or the ratio of the judgment of the Constitution Bench. We are constrained to record our strong disapproval of such irrelevant and inappropriate conduct of statutory authorities, particularly when exercising quasi-judicial jurisdiction, in disregarding the clearly declared law, which is a binding precedent, in particular in the context of Article 141 of the Constitution. As a consequence of such vagrant analysis by the ld. Commissioner (Appeals), the appellant herein has been put to avoidable litigation trauma in preferring this appeal to this Tribunal and an unwarranted appellate burden as well."
4.28 The appellant in case of Indian Farmer Fertilizer Cooperative Ltd, supra did not challenged the order dated 5.04.2011 rejecting the refund claim before Assistant Commissioner, Service Tax Division-V but challenged the order dated 16.04.2012 of the Commissioner (Appeal), in case of the refund claim filed by them before Assistant Commissioner Central Excise Bareilly. The issue not considered and decided by the tribunal in that case was in respect of the jurisdiction in which the said claim was to be filed. Hence to that extent that decision is sub-silento. This decision was followed by the tribunal in case of Jindal Steel & Power Ltd [2015-TIOL-2000-CESTAT-DEL], holding as follows:
"3. The appellant is an integrated steel plant operating within the jurisdiction of the Commissioner, Central Excise, Raipur and had engaged M/s Gannon Dunkerly and Co. Limited to execute works relating to construction of a bridge over a railway line for providing access to the appellant's factory premises. During 17.05.2011 to 12.08.2011 the service provider M/s Gannon Dunkerly & Co. Limited had remitted service tax on the basis that it had provided the taxable Commercial or Industrial Construction Service and charged the amount of service tax to the appellant. The appellant, after realising that the definition of Commercial or Industrial Construction Service excludes construction of a bridge, filed the refund claim on 21.03.2012 before 48 ST/87410/2018 the Deputy Commissioner, Service Tax Division-II, Delhi claiming a refund of Rs.4,26,305/-, constituting the service tax remitted by the appellant towards the non-taxable service of construction of a bridge, provided by M/s Gannon Dunkerly & Co. Limited. On 20.04.2012, the Deputy Commissioner, Delhi returned the refund claim on the ground that the appellant was not within his jurisdiction and therefore he had no power to grant refund. The assessee/appellant again represented to the Deputy Commissioner, Delhi for granting refund which was again rejected on 09.08.2012 and for the same reason.
4. Thereafter, the appellant then preferred a claim for refund before the Assistant Commissioner, Central Excise, Bilaspur on 22.08.2012 after a downward revision of its claim to Rs. 3,06,313/-. The Assistant Commissioner, Bilaspur issued a show cause notice dated 18.10.2012 proposing the rejection of the claim on two grounds (i) on the bar of limitation; and (ii) since services were provided by Gannon Dunkerley & Co. Limited which was within the jurisdiction of the Delhi Commissionerate, the Bilaspur Commissionerate had no jurisdiction. Eventually, the Assistant Commissioner, Bilaspur passed an order dated 12.12.2012 rejecting the claim for refund both the grounds as proposed in the show cause notice.
5. Aggrieved, the appellant preferred an appeal which was also rejected by the ld. Commissioner (Appeals), Central Excise, Raipur by the impugned order dated 09.10.2013. It requires to be noticed that the impugned order allowed the appellant's contention on the aspect of the bar of limitation since the appellant had filed its initial refund claim within the prescribed period, before the Deputy Commissioner, New Delhi on 21.03.2012. The ld. appellate Commissioner however concluded that the refund claim cannot be entertained since the provider of the service was within the jurisdiction of the Delhi Commissionerate and therefore the refund claim should be entertained by the Delhi Commissionerate and not the Bilaspur Commissionerate.
6. The fact that the recipient of the service is also entitled to file a claim for refund is no longer res-integra. The issue stand concluded by the Constitution Bench decision in Mafatlal Industries Limited vs. Union of India - 1997 (89) ELT 247 (SC) . This decision was followed in Indian Farmer Fertilizer Co-op. Ltd., vs. CCE, Meerut-II - 2014 (35) STR 422 (Tri. Del.) . If the appellant which is a recipient of a service which is admittedly not taxable files a claim for refund within the 49 ST/87410/2018 prescribed period of limitation, it is axiomatic that it is entitled to do so before the Commissionerate under whose jurisdiction it pursues its taxable activities, business or is a registrant; or before the Commissionerate having authority over the provider of the service. That would be a matter of a legitimate choice for a claimant of refund. In this case, the appellant had initially filed a claim before the Delhi Commissionerate which rejected the same on the ground that it had no jurisdiction since the appellant was pursuing business outside its jurisdiction. The Bilaspur Commissionerate also rejected the refund claim on the ground that the provider of the service is not within its jurisdiction. The rejection by both Commissionerates is in my view unsustainable."
4.29 Without analyzing the provisions of the Acts and Rules, the tribunal in case of Jindal Steel & Power, supra, did not decide the issue of jurisdiction but holds that the service recipient is entitled to file the refund claim in both the jurisdictions, i.e. before the Assistant Commissioner where service provider is registered or before the Assistant Commissioner where he is registered. This decision has been followed by the tribunal in the case of Chambal Fertilizers and Chemicals Ltd, relied upon by the Appellants before us. The approach of the tribunal in case of Jindal Power and Steel, that service recipient is entitled to file the refund claim, either before the Assistant/Deputy Commissioner in jurisdiction where he is registered or before the Assistant/ Deputy Commissioner of the jurisdiction were the Service Provider is registered, is contrary to what has been stated by the Hon'ble Apex Court in case of Mafatlal Industries, and Hon'ble Rajasthan High Court in the case of Chambal Fertilizers and Chemicals Ltd. The para 90 of the decision of Hon'ble Apex Court is reproduced below:
"90. We agree with Sri Parasaran that so far as the provisions of the Act go, they are unexceptionable. Section 12C which creates the Consumer Welfare Fund and Section 12D which provides for making the Rules specifying the manner in which the money credited to the Fund shall be utilised cannot be faulted on any ground. Now, coming to the Rules, it is true that these Rules by themselves do not contemplate refund of any amount credited to the Fund to the consumers who may have borne the burden; the Rules only provide 50 ST/87410/2018 for "grants" being made in favor of consumer organizations for being spent on welfare of consumers. But, this is perhaps for the reason that Clause (e) of the proviso to sub-section (2) of Section 11B does provide for the purchaser of goods applying for and obtaining the refund where he can satisfy that the burden of the duty has been borne by him alone. Such a person can apply within six months of his purchase as provided in Clause (e) of Explanation-B appended to Section 11B. It is, therefore, not correct to contend that the impugned provisions do not provide for refunding the tax collected contrary to law to the person really entitled thereto. A practical difficulty is pointed out in this behalf by the learned Counsel for appellants-petitioners : it is pointed out that the manufacturer would have paid the duty at the place of "removal" or "clearance" of the said goods but the sale may have taken place elsewhere; if the purchaser wants to apply for refund - it is submitted - he has to go to the place where the duty has been paid by the manufacturer and apply there. It is also pointed out that purchasers may be spread all over India and it is not convenient or practicable for all of them to go to the place of "removal" of goods and apply for refund. True it is that there is this practical inconvenience but it must also be remembered that such claim will be filed only by purchasers of high priced goods where the duty component is large and not by all and sundry/small purchasers. This practical inconvenience or hardship, as it is called, cannot be a ground for holding that the provisions introduced by the 1991 (Amendment) Act are a "device" or a "ruse" to retain the taxes collected illegally and to invalidate them on that ground - assuming that such an argument is permissible in the case of a taxing enactment made by Parliament. (See R.K. Garg and other decisions cited in Paras 78 and
79)."
From the perusal of this paragraph it is quite evident that while Hon'ble Apex Court has held that purchaser of goods too can file the refund claim, but holds that the refund claim needs to be filed in the jurisdiction from where the goods were cleared on payment of duty.
51 ST/87410/2018 4.30 In case of Chambal Fertilizers and Chemicals Ltd [2018 (15) GSTL 576 (Raj)]], Hon'ble Rajasthan High Court stated the law as follows:
"9. In our considered opinion, it is always better to allow the assessee to claim from his jurisdictional Commissioner since it is very easy to claim the same and it is settled preposition that the person who paid the amount to an authority, must claim the refund from the same authority.
10. In that view of the matter, we are in complete agreement with the view taken by the Tribunal.
11. For the jurisdiction, we are of the opinion that if question is decided to keep open for the assessee to claim on two places, will lead to criminal wastage of time in as much as the non-jurisdictional Commissioner has to verify from the Commissioner for the payment made and instead of that it is always better for the convenience of the Central Government to keep it with the jurisdictional Commissioner."
In view of the law as stated by the Hon'ble Rajasthan High Court, we are not inclined to go by those orders of the tribunal which hold that the service recipient had the option to file the refund claim either with the Assistant Commissioner in the jurisdiction where he is registered or with the Assistant Commissioner in the jurisdiction were service provider is registered.
4.31 Rejecting the argument to effect that purchaser of the goods could have filed the refund claim before the Assistant Commissioner, in jurisdiction where he is registered, tribunal has in case of Oswal Chemical and Fertilizers [2003-TIOL-170-CESTAT-DEL] observed as follows:
"6. It must be remembered that "demand" and "refund" are merely two sides of the same coin namely assessment of goods to Central Excise duty. The goods in this case are "naptha". These have been subjected to excise duty at the factory in which the same were manufactured namely the refinery. In this case, it is to be noted that, the said naptha was manufactured by M/s I.O.C. The same was despatched to M/s. BPCL on payment of full duty. The appellants had purchased the said naptha from M/s. BPCL on payment of a price which included full excise duty. The conclusion as to whether the 52 ST/87410/2018 payment of duty by the refinery, in respect of the consignments cleared to the appellants was in excess of the payment due under the law or otherwise has to be arrived at by the Central Excise officers in charge of the refinery. The learned Commissioner (Appeals) in his findings has correctly held that M/s. IOC, the manufacturer could not have had the knowledge of the intended use of a portion of naptha that was to be eventually sold by their buyer viz. BPCL, to claim concessional payment of duty. In order to enable the assessing officers to come to such a conclusion, it is necessary that, the manufacturer who has paid the duty in respect of these consignments, namely the "Refinery" has to furnish the details of payment of full duty along with the ground/claim for duty concession. Where such a claim succeeds, the refundable amount becomes payable to the manufacturer and the duty paying documents are thereafter suitably corrected to reflect the actual amount in the credit of the Govt., after offsetting the refunded amount. Therefore, it is obvious that in terms of the aforesaid position only the 'refinery' can seek refund and not the "appellants" who are the purchasers of naptha and the so called "excess duty" paid by them to the suppliers is not an excise duty a part of the price, paid to the seller. Further, such a claim must be lodged with the Assistant Commissioner of Central Excise, having jurisdiction over the refinery and not with the Assistant Commissioner having jurisdiction over appellant's factory. As the reading of the entire text of Section 11B reveals, it is the Assistant Commissioner in charge of the refinery alone, who not only can determine the computation of refundable amount, but also other eligibility parameters such as acceptance of duty paying documents, limitation, unjust enrichment etc. with reference to the duty paid by the refinery.
7. As mentioned at the outset, the appellants are claiming the refund as being "any other person". It is their case that, besides a manufacturer "any other person" can also claim refund as provided under Section 11B of the Act. It is claimed that, since they have paid higher duty than was required they can claim refund of this excess duty.
10. We have already observed that that, rigours of accounting require that all excess/short payments have to refer to the 53 ST/87410/2018 payments made originally through the concerned account current (PLA). Short payments or refunds must finally figure in the said PLA through appropriate reference/accounting entry. In case the refund as claimed by the appellants was to be accepted by Central Excise Assistant Commissioner in charge of the appellant's factory, there is no duty paying document pertaining to the appellants which can show that from Appellant's PLA any excess duty has been paid. The Assistant Commissioner in charge of the appellant's factory cannot sit in judgment over the correctness or otherwise of payment of duty made by the naptha manufacturer. Therefore, the AC Central Excise in charge of appellant's factory has no jurisdiction to entertain the refund claim in question. The claim has, therefore, been correctly rejected on the ground of locus standi."
This order of tribunal was appealed before the Hon'ble Apex Court has dismissed the appeal [2015 (318) ELT 617 (SC)] filed by the Appellant holding that the refund claim was filed beyond the period of limitation. On the issue of jurisdiction, however, Hon'ble Apex Court categorically held that the Assistant Commissioner having jurisdiction over the refinery from where the goods were cleared on payment of duty had jurisdiction to decide on the refund claim. The observations made by the Hon'ble Apex Court are reproduced below:
"9.The second reason given by the CESTAT, as mentioned above, is that the appellant had preferred this application before a wrong authority. Here we find that the appellant had filed the refund claim before the Central Excise Authorities at Durgapur. The appellant had purchased the material from IOCL which is having its refinery at Durgapur. The show cause notice was also issued by the Superintendent of Central Excise at Durgapur. It appears that the CESTAT is influenced by the reason that the depot is located at Haldia and on that ground, it has come to the conclusion that the authorities at Durgapur had no jurisdiction. The aforesaid reason given by the CESTAT is factually incorrect. We find that the purchases were from depot at Rajbandh under the IOCL refinery at Durgapur and therefore, the Central Excise authorities at Durgapur had the requisite jurisdiction over IOCL Depot located at Rajbandh, as it comes under Durgapur Commissionerate."
54 ST/87410/2018 4.32 In respect of Section 103 of the Finance Act, 1994 as inserted by Finance Act, 2016, we have earlier referred to the decisions of Hon'ble Bombay High Court and Hon'ble Gujarat High Court, that this section provides for the conditional exemption in respect of the specified services, retrospectively for the specified period. Service provider has in the jurisdiction where he is registered appropriately paid the Service Tax due on these services. By not claiming the refund as per the by availing the exemption as per Section 103, Service Provider continues to avail the other benefits as admissible in law. On the other hand if the service recipient claims the refund as per section 103, in a jurisdiction elsewhere other than that of the service provider and such refund claim is allowed in that jurisdiction, then will it not amount to double benefit in respect of same transaction? Section 103 or Section 11B as it is do not permit the filing of the refund claim in multiple jurisdiction as has been pleaded by the Appellant on the basis of the decisions of tribunal referred by them. Interestingly in all the cases referred and rightly observed by the Commissioner (Appeal) the claimant had filed the refund claim in the both jurisdiction i.e. where the service provider was registered and where the service recipient was registered. We have no hesitation in agreeing to the observations made by the tribunal to effect that both the jurisdictions cannot refuse to entertain the refund claim filed by the recipient of service.
4.33 We would now refer to the decision of the Chennai Bench in case of VIT Consultancy Pvt Ltd., supra referred to by the Appellants. The relevant excerpts from the decision are reproduced below:
"4. Ld. Advocate appearing for the appellant submits that they are registered with Commissionerate-I, has been filing their returns with Commissionerate-I and as such filed the refund claim with Commissionerate-I only. As such the refund claim was filed with the Commissionerate having jurisdiction over them. If Commissionerate-I was not having jurisdiction, it was for the authorities to say so and not to decide their refund claim. He also submits that the refund has already been sanctioned to them and the division of the Commissionerate is only for ease of working and the department is one only and the refund actually sanctioned by the authorities cannot be rejected on the hyper technical grounds.
5.1 After hearing the Ld. DR, I find that there is no dispute about the facts and nor about legal issue and the appellant's entitlement to the 55 ST/87410/2018 refund of the accumulated Cenvat credit. The only ground on which the Commissioner (Appeals) has set aside the order of the lower authority sanctioning refund is that the officer was not having jurisdiction in as much as the refund should have been filed with Commissionerate-III. In the absence of any dispute about legality of the refund claim or about appellant's entitlement to the same, I find that setting aside the order by the Commissioner (Appeals) is not justified. In case, the officer who sanctioned the refund claim was not having jurisdiction over the appellant, it was for him to return the papers back to the assessee for proper filing or to transfer the same to the correct Commissionerate. In any case, the appellate authority set aside the order instead of remanding the matter to be re-adjudicated by the proper officer."
In this decision, the bench has held if the officer with whom the refund claim was filed was not having the jurisdiction to decide upon the refund claim then instead of processing the same, he should have either transferred the same to the officer having the jurisdiction or should have returned back the paper to the claimant for proper filing. In the case before us Deputy Commissioner has returned back the papers to the Appellant for filing before the appropriate authority.
4.34 In view of the discussions as above, the Assistant/ Deputy Commissioner Division-9, Service Tax - VII, Mumbai is not having jurisdiction either under sub-section 1 or sub-section 2 of Section 11 B (1) of Central Excise Act, 1944 read with section 83 of the Finance Act, 1994, either to receive or adjudicate upon the refund claim in respect of the Service Tax payments made in the jurisdiction of Kolkata Commissionerate, even in respect of the service recipient registered in his jurisdiction.
4.35 In para 4.14, supra we have discussed the manner in which the jurisdiction has been conferred upon the authorities beyond their functional/ territorial jurisdiction to perform certain specified functions in respect of the powers conferred in terms of the provisions of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994. Since no notification conferring jurisdiction upon the authorities in Mumbai to receive the refund claim in respect of refunds to be processed under by the jurisdictional officers at Kolkata has been issued by the competent authority we are not inclined to agree with 56 ST/87410/2018 the arguments advanced by the appellant that Assistant/ Deputy Commissioner at Mumbai should have either got the verification report from the jurisdictional Commissionerate or should have transferred the refund claim filed by them to the concerned jurisdiction. This tribunal too do not have any authority under the statue to confer jurisdiction upon any authority under the Act, to perform the duties/ exercise those powers which have not been conferred upon that authority in terms of the notification issued under Rule 3 of Service Tax Rules, 1994 read with Rule 3 of Central Excise Rules, 2002.
4.36 We are also not inclined to agree with the submissions made by the Appellant, that the Supplementary Instructions, issued by the Board and referred by the Commissioner (Appeal) while rejecting the appeal filed by them shall not apply to cases of refund under Chapter V of the Finance Act, 1994, because under Central Excise every factory of the manufacturer is registered as separate entity, whereas Service Tax law provides for the centralized registration. The argument should fall as the service provider and service recipient in the present case are not covered by the same centralized registration. Centralized registration is qua the different premises of the same person from where he provides the taxable service. Centralized registration is not in respect of different persons/ entities, who are in respect of particular transaction bound by the relationship of service provider and service recipient.
4.37 Appellants have in their submission argued on the issue of limitation, relying on certain case laws holding that section 14 of the Limitation Act should apply for determining their case on limitation. Since the issue of limitation was never before the lower authorities or considered by them we do pronounce on this issue, except for observing that Hon'ble Supreme Court has in case of Mafatlal Industries, specifically ruled out the application of Limitation Act to the matters of refund under Central Excise Act, 1944 and Customs Act 1962 holding as follows:
"(i) Where a refund of tax/duty is claimed on the ground that it has been collected from the petitioner/plaintiff - whether before the commencement of the Central Excises and Customs Laws (Amendment) Act, 1991 or thereafter - by mis-interpreting or mis-applying the provisions of the Central Excises and Salt Act, 1944 read with Central Excise Tariff Act, 1985 or Customs Act, 57 ST/87410/2018 1962 read with Customs Tariff Act or by mis-interpreting or misapplying any of the rules, regulations or notifications issued under the said enactments, such a claim has necessarily to be preferred under and in accordance with the provisions of the respective enactment before the authorities specified thereunder and within the period of limitation prescribed therein. No suit is maintainable in that behalf. While the jurisdiction of the High Courts under Article 226 - and of this Court under Article 32 - cannot be circumscribed by the provisions of the said enactments, they will certainly have due regard to the legislative intent evidenced by the provisions of the said Acts and would exercise their jurisdiction consistent with the provisions of the Act. The writ petition will be considered and disposed of in the light of and in accordance with the provisions of Section 11B. This is for the reason that the power under Article 226 has to be exercised to effectuate the rule of law and not for abrogating it.
The said enactments including Section 11B of Central Excises and Salt Act and Section 27 of the Customs Act do constitute "law" within the meaning of Article 265 of the Constitution of India and hence, any tax collected, retained or not refunded in accordance with the said provisions must be held to be collected, retained or not refunded, as the case may be, under the authority of law. Both the enactments are self-contained enactments providing for levy, assessment, recovery and refund of duties, imposed thereunder. Section 11B of the Central Excises and Salt Act and Section 27 of the Customs Act, both before and after the 1991 (Amendment) Act are constitutionally valid and have to be followed and given effect to. Section 72 of the Contract Act has no application to such a claim of refund and cannot form a basis for maintaining a suit or a writ petition. All refund claims except those mentioned under Proposition (ii) below have to be and must be filed and adjudicated under the provisions of the Central Excises and Salt Act or the Customs Act, as the case may be. It is necessary to emphasise in this behalf that Act provides a complete mechanism for correcting any errors whether of fact or law and that not only an appeal is provided to a Tribunal - which is not a departmental organ - but to this Court, which is a civil court."
58 ST/87410/2018 5.1 In view of discussions as above we do not find any merits in the appeal filed and dismiss the same.
(Pronounced in open court on 28 June, 2021) Sanjiv Srivastava Member (Technical) (Dr. Suvendu Kumar Pati) Member (Judicial) 59 ST/87410/2018 Difference of Opinion PER: DR. SUVENDU KUMAR PATI
6. I have the occasion to go through the draft order prepared by my Learned Brother but I have a slightly different view on the background of the issue that has brought the appeal to this forum for determination of the eligibility of appellant in getting refund in terms of Clause 2 of Section 103 of the amended Finance Act, 2016 which starts with a very assertive wordings that reads:
"Refund shall be made of all such Service Tax which has been collected but which would not have so collected had Sub-Section 1 being in force at all material times."
The implication of this Section is that refund has to be made since it was not a Service Tax that was supposed to be collected. Therefore, the jurisdictional officer has got no discretion to refuse a refund if application for claim of refund of Service Tax would be made within a period of six months from the enforcement of Finance Bill, 2016 in view of its Clause 3. This is the broad outline set by the Legislature in which the competent authorities are required to operate.
7. Appellant is a service receiver at Mumbai from whom service provider of Kolkata had collected Service Tax and paid it at his territorial jurisdiction at Kolkata. The refund claim is filed by the appellant before its Service Tax Authority namely the Deputy Commissioner, Division-9, Service Tax-VII, Mumbai who returned the claim filed by the appellant with his observation on the issue of jurisdiction and on the merit of the refund application vis.a.vis eligibility of the appellant, all observations being against the appellant.
Such observations were communicated by the Deputy Commissioner 60 ST/87410/2018 to the appellant through a letter correspondence annexing the appellant's refund application and connected documents as he though it proper to return the refund claim of the appellant for want of jurisdiction. It is not understood under which provision of Service Tax/Central Excise Act and Rules he considered himself empowered to return a refund claim without adjudication.
8. Appellant preferred an appeal under Section 85 of the Finance Act apparently because he considered such decision or order of the adjudicating authority namely Deputy Commissioner as appealable. Ld Commissioner (Appeals) admitted the appeal and decided on the merit of the appeal holding that appellant being a service recipient is entitled to seek refund by filing refund application but such an application can only be filed before the Deputy Commissioner/Assistant Commissioner of Central Excise where the tax was collected despite the fact that plethora of decisions exist to the contrary. He even had gone to the extent of distinguishing some of the factual context of those decisions with the case in hand, which can be dealt subsequently in the later part of this order as at this stage my observations on the factual backdrops is on a different direction which I consider to place on record at the first instance.
8.1 There are two legal issues involved concerning procedural requirements to be followed by the adjudicating authority and the Commissioner (Appeals). First, there exist no provision that authorized the adjudicating authority to return the claim application without taking a decision on it. Second, Commissioner (Appeals)' empowerment to entertain such a covering letter intimating return of refund application as a decision or order and entertaing an appeal 61 ST/87410/2018 against such letter correspondence. I have not come across any such provision in the indirect taxation statute/rules but it is a common knowledge that when there is no specific provision available, reference to the Civil Procedure Code is normally made and apparently both the authorities below have dealt the application for refund filed by the appellant subconsciously under Order 7 Rule 10 of the Civil Procedure Code that empowers a court to return the plaint to the plaintiff and direct him to present the same to the court in which it should have been instituted. This is an appealable order as per Rule 10B where the Appellate Court is empowered to transfer the case to the proper court and in such circumstances the provisions of Limitation Act, 1963 would be applicable. Learned Commissioner (Appeals), though in his subconscious mind has taken recourse to order 7 Rule 10B of CPC, has not preferred to transfer the refund claim application to Kolkata after observing that his Deputy Commissioner lacks jurisdiction to entertain the refund claim, in which case, in applying the ratio of the decision passed in M.P. Steel Corporation Vs. Central Excise by the Hon'ble Supreme Court on 23.04.2014, would have extended the benefit of Section 14 of the Limitation Act, since it was apparent on the face of record that appellant was prosecuting proceedings diligently and in a bonafide manner, though to his opinion, in a wrong forum in order to honour the supremacy of Parliament in complying Sub-Section 2 of Section 103 of Finance Act, 2016 that refund shall be made.
9. Be that as it may, even otherwise also Commissioner (Appeals) has erred in holding that the Deputy Commissioner, Mumbai was not empowered to order for refund to the appellant for want of jurisdiction for the reason that he relied upon the manual of CBEC of 2001 containing instructions for the officials wherein Deputy 62 ST/87410/2018 Commissioner/Assistant Commissioner of Central Excise "having jurisdiction over the factory of manufacturer" has been inserted in gross violation of the dictates of the legislature. Further, he distinguished the case laws cited by the appellant primarily on two grounds namely that the claim was not rejected on merit but it was returned to the applicant and that both Mumbai and Kolkata Authorities have not rejected the claim, which can be regarded as vague distinction made for lack of understanding of the ratio of the decisions mainly that Chambal Fertilsers and Chemical Ltd. Vs. Commissioner of Central Excise and also in the case of Devasthan Vibhag Vs. Commissioner of Central Excise where only a letter from the Additional Accounts Officer concerning payment of duty was acknowledged, which procedure has become absolate in this centralised filing system.
10. It would be inappropriate to depart from the observation made by my Learned Brother in para 4.29 and 4.30 of his order since it would look like sitting in an appeal over the decision arrived by the other Member of the Bench as his reasoning is available with me.
However going by the case of Mafatlal Industries that has highlighted the practical difficulty in filing a refund claim by a purchaser at the place of removal namely at the factory site it can be observed that such a proposition was argued before the Court without a legal provision backing the same and Hon'ble Apex Court had refused to accept the submissions as valid proposations to set aside 1991 Amendment Act. As such when no provision is available in the statute or in the Amended Act that would stipulate filing of refund claim at the place of removal of the goods by the purchaser, analysis of the same to counter the argument of the learned Counsel for the appellants-
63 ST/87410/2018 petitioners would never act even as an orbiter dicta under the rule of precedent. Likewise, an observation in Chambal Fertilsers and Chemical Ltd. Judgment by the Hon'ble Rajasthan High Court that it is always better for the convenience of the central government to confine the claim for refund with the jurisdictional Commissioner has in no way revered the findings of this Tribunal that the service recipient had the option to file the refund claim either with the Assistant Commissioner in the jurisdiction where service receiver is registered or with the Assistant Commissioner in the jurisdiction where service provider is registered. Hence, in caring forward the judicial precedent set by this Tribunal, to my considered view, a finding can be placed in the appellate order of this Tribunal that appellant is entitled to get the refund claim at Mumbai and therefore the order passed by the Commissioner (Appeals) is required to be set aside.
Dr. Suvendu Kumar Pati Member (Judicial) 64 ST/87410/2018 Points of Difference In view of the difference of opinion between learned Member (Technical) and learned Member (Judicial) on the findings pertaining to jurisdiction of Mumbai Service Tax authority or Kolkata Service Tax authority to deal with the refund application of the appellant, filed in terms of Section 103 of the Finance Act, 1994, the Registry is directed to place the matter before the Hon'ble President, in accordance with Section 129C(5) of the Customs Act, for resolution of the following points of difference:-
1. Whether the Deputy Commissioner, Division-9, Service Tax-VII, action in returning the refund claim that has been upheld by the Commissioner (Appeals) is to be upheld by the CESTAT as opined by Member (Technical) or is to be set aside as opined by Member (Judicial).
2. If the answer to point No.1 is in the affirmative, whether the appellant's submission for invocation of Section 14 of the Limitation Act to exclude the period covered in the entire process of litigation is not to be answered as held by Member (Technical) in para 4.37 of his order or the same needs a finding as held by Member (Judicial) in para 8.1of his order.
(Order pronounced on 28.06.2021) (SANJIV SRIVASTAVA) MEMBER (TECHNICAL) (DR. SUVENDU KUMAR PATI) MEMBER (JUDICIAL) tvu 65 ST/87410/2018 ORDER ON DIFFERENCE OF OPINION INTERIM ORDER NO. 106/2023 Date of Hearing: 06.01.2023 Date of decision: 05.07.2023 11.1 The back ground facts, leading to the difference of opinion by the learned Members in the Division Bench, in a nut shell, are that the appellants herein M/s. Nhava Sheva (India) Gateway Terminals Pvt. Ltd., during the material period, had entered into an agreement dated 29.09.2014 with M/s. ITD Cementation India Ltd. (M/s. ITD), Kolkata for receiving construction services at Nhava Sheva Port. Construction services pertaining to a port was exempted from payment of service tax in terms of Sr. No.14(a) of the Notification No. 25/2012 dated 20.06.2012. However, w.e.f. 01.03.2015, vide Notification No. 6/2015-ST dated 01.03.2015, the said exemption provided under the earlier notification dated 20.06.2012 was withdrawn, by omitting the words "an airport, port or...". Owing to the reason of withdrawal of the exemption, the service provider M/s. ITD had started collecting service tax from the appellants and paid the same into the Government exchequer. The Finance Act, 2016 has amended the Finance Act, 1994 by way of insertion of Section 103 therein. As a result of addition of the said section, the exemption from payment of service tax, earlier provided under the Notification dated 20.06.2012 was restored in respect of services provided by way of construction pertaining to the port for the period 01.04.2015 to 29.02.2016 (both days inclusive). The said section also provided that, service tax which has been collected, but which would not have been so collected, had the said retrospective restoration of the exemption been in force, during all material times, shall be refunded. The appellants having suffered the service tax charged and collected by M/s. ITD, had filed a refund application on 27.10.2016 with their jurisdictional Deputy Commissioner, claiming refund of service tax amounting to Rs. 6,06,92,391/- paid by them during the period from 01.04.2015 to 29.02.2016.
11.2 The refund application was returned by the jurisdictional Deputy Commissioner, Division-IX, Service Tax Commissionerate-VII, Mumbai to the 66 ST/87410/2018 appellants under the cover of his letter dated 08.12.2016. In support of returning the refund application, the Deputy Commissioner has assigned the reason that the service tax has not been paid by the appellants into the account of Service Tax-VII Commissionerate, but the same has been paid by the service provider at Service Tax, Kolkata Commissionerate; that the relevant notifications and Section 103 ibid mandates that the 'service provider' is allowed to claim the benefit of refund and not the 'recipient of service'. Against the said communication of the original authority, the appellants have preferred appeal before the learned Commissioner (Appeals), Mumbai, which was disposed of vide order dated 01.03.2018 (impugned herein), by rejecting the same. The learned Commissioner (Appeals) has framed the following questions for disposal of the appeal by him:-
(i) Whether the service receiver can file the refund claim?
(ii) Whether the refund claim of the appellant is filed outside the jurisdiction? and
(iii) Whether the action of returning the refund claim by the adjudicating authority is proper or otherwise?
11.3 Out of the above three questions framed by the learned Commissioner (Appeals), the first question was decided in favour of the appellants and the other two issues itemised at Sr. No. (ii) and (iii) above were decided against the appellants. Feeling aggrieved with the impugned order, the appellants have preferred appeal before the Tribunal. With regard to the issue of jurisdiction for deciding the refund claim application, the learned Members in the Division Bench had differed in their opinion and accordingly, the matter was referred by the Hon'ble President of the Tribunal, to me as a Third Member, for resolving such dispute. Points of difference between the learned Member (Technical) and learned Member (Judicial) of the Bench have already been set out in the preceding paragraphs. However, for ease of reference, the issues of difference, views expressed by both the learned Members and relevant paragraphs recorded in the Interim Order No. 04/2021 dated 28.06.2021 are set out in a tabular form, as under:-
Sl. Issue/ points of Views expressed by the Member Views expressed by the Member difference (Technical) & relevant para in the (Judicial) & relevant para in the interim interim order order
1. Whether the Deputy Commissioner could have There exists no provision that authorizes Deputy either transferred the refund claim to the adjudicating authority to return the Commissioner, the officer having jurisdiction or could refund claim, without taking a decision Division-9, Service have returned back the papers to the on it. [Para 8.1, page 60 & Para 7, page 59 Tax-VII, action in claimant. [Para 4.33, page 54] - 60] returning the refund claim that 67 ST/87410/2018 Sl. Issue/ points of Views expressed by the Member Views expressed by the Member difference (Technical) & relevant para in the (Judicial) & relevant para in the interim interim order order has been upheld by By relying upon Mafatlal and ITC Ltd., In terms of Section 103 of the Finance the Commissioner holds that only that officer who had Act, the jurisdictional officer has no (Appeals) is to be assessed or could have assessed the discretion to refuse a refund if the upheld by the returns filed by the assessee initially is application is made within a period of six CESTAT as opined empowered to process the refund months from the enforcement of the by Member claims filed by any person, in respect Finance Bill, 2016, in view of its clause 3.
(Technical) or is to of those returns. Without [Para 6, page 59] be set aside as questioning/modifying the self-
opined by Member assessment made by the service
(Judicial) provider in Kolkata, no refund can be
made to any person even if admissible
under Section 103 of the Finance Act.
Since the services have been
subsequently exempted as per Section
103, the service provider could claim
the benefit of this exemption only on
complying with Rule 6 of the CENVAT
Credit Rules, 2004 [Para 4.22 to 4.26,
pages 38 to 44]
The Commissioner (Appeals) erred in
holding that the Deputy Commissioner,
Mumbai was not empowered to order
the refund for want of jurisdiction for the
following reasons:
It cannot be said that the CBEC a. reliance by Commissioner (Appeals)
supplementary instructions referred on CBEC supplementary instructions
by the Commissioner (Appeals) do not is bad in law, as the words "having
apply to cases of service tax refunds jurisdiction over the factory of
[Para 4.36, page 56] manufacturer" have been inserted in
the said Instructions in violation of
the dictates of the Legislature [Para 9,
pages 61 and 62]
Commissioner (Appeals) has rightly b. Commissioner (Appeals) has failed to
distinguished the cases relied upon by appreciate and follow the judgments
the Appellant on the grounds that in in Chambal Fertilizers as well as
the said cases, refund claims were Devasthan Vibhag, by vaguely
filed in both jurisdictions. Both distinguishing them on the grounds
jurisdictions cannot refuse to that the claim was not rejected by
entertain the refund claim filed by the either jurisdiction on merits but was
recipient of service. [Para 4.32, page returned to the Appellant.
54]
The Supreme Court in Mafatlal Industries
had refused to accept the submissions
The Hon'ble Supreme Court in (qua practical difficulty in filing a refund
Mafatlal Industries has held that even claim by a purchaser at the factory site)
though the purchaser of goods can file to set aside the 1991 Amendment Act
the refund claim, it needs to be filed in since the said arguments were made the jurisdiction from where the goods without a legal provision backing the were cleared on payment of duty. same.
[Para 4.29, pages 49 and 50] When the statute does not stipulate filing of a refund at the place of removal of the goods by the purchaser, analysis of the same to counter the argument of the Appellant is erroneous (as the same would not act even as obiter dicta under the rule of precedents) [Para 10, page 62] 68 ST/87410/2018 Sl. Issue/ points of Views expressed by the Member Views expressed by the Member difference (Technical) & relevant para in the (Judicial) & relevant para in the interim interim order order In view of the observation of the Rajasthan High Court in Chambal Rajasthan High Court in Chambal Fertilisers was "in complete agreement Fertilisers that it is always better to with the view taken by the Tribunal." A confine the claim for refund with the mere observation that it is always better jurisdictional commissioner, holds that to confine the claim for refund with the the Tribunal is not inclined to follow jurisdictional commissioner has in no way the earlier orders of the Tribunal reversed the findings of this Tribunal that holding that the service recipient has the service recipient has the option to the option to file refund claim at claim refund in either jurisdiction. [Para either jurisdiction. [Para 4.30, page 10, page 63] 51] The Deputy Commissioner (Mumbai) Carrying forward the judicial precedents does not have the jurisdiction to set by this Tribunal, the Appellant is either receive or adjudicate upon the entitled to get the refund claim at refund claim in respect of the service Mumbai. [Para 10, page 63] tax payments made in the jurisdiction of Kolkata Commissionerate, even in respect of the service recipient registered in his jurisdiction. [Paras 4.34 and 4.35, pages 55 and 56]
2. If the answer to The issue of application of Limitation In terms of Order 7 Rule 10B of the Civil point No. 1 is in the Act was never before the lower Procedure Code, 1908, the lower affirmative, authorities. In any event, Supreme authorities were required to transfer the whether the Court in Mafatlal Industries had refund claim to Kolkata. [Para 8.1, page appellant's specifically ruled out the application of 61] submission for Limitation Act to the matters of refund invocation of under Central Excise Act, 1944. [Para Applying the Supreme Court's ratio in Section 14 of the 4.37, page 56] M.P. Steel Corporation vs. Central Excise, Limitation Act to the benefit of Section 14 of the Limitation exclude the period Act is to be extended to the Appellant, covered in the since it was apparent on the face of the entire process of record that the Appellant was diligent litigation is not to and acting in a bona fide manner. [Para be answered as 8.1, page 61] held by Member (Technical) in para [Note of the Appellant: Since answer to this 4.37 of his order or question was relevant only if answer to the same needs a Question 1 was to be in affirmative. Since finding as held by Member (J)'s answer to Question 1 is not in affirmative i.e. disagreeing with Member (T), Member (Judicial) answer to this question may only be in para 8.1 of his academic.] order
12. Heard both sides and examined the case records.
13.1 In the Finance Act, 2016 (No.28 of 2016), specific provisions have been incorporated as a part of the Act of 1994, for exempting the specified services from levy of service tax, for a specified period. Corresponding 69 ST/87410/2018 machinery provisions for filing of refund claim by an applicant and refund of the same to such applicant were also made therein. The relevant statutory provision is extracted herein below:-
"103. (1) Notwithstanding anything contained in section 66B, no service tax shall be levied or collected during the period commencing from the 1st day of April, 2015 and ending with the 29th day of February, 2016 (both days inclusive), in respect of services provided by way of construction, erection, commissioning or installation of original works pertaining to an airport or port, under a contract which had been entered into before the 1st day of March, 2015 and on which appropriate stamp duty, where applicable, had been paid before that date, subject to the condition that Ministry of Civil Aviation or, as the case may be, the Ministry of Shipping in the Government of India certifies that the contract had been entered into before the 1st day of March, 2015.
(2) Refund shall be made of all such service tax which has been collected but which would not have been so collected had sub-section (1) been in force at all material times.
(3) Notwithstanding anything contained in this Chapter, an application for the claim of refund of service tax shall be made within a period of six months from the date on which the Finance Bill, 2016 receives the assent of the President."
13.2 On reading of statutory provisions contained in Section 103 of the Act of 1994, it would reveal that sub-section (1) and sub-section (3) contained therein, start with the non-obstante clause, meaning thereby that the said sub-sections shall have the overriding effect, over the other section(s) captured in the said non-obstante clause, or to override those other section(s) in specified circumstances. Due to the non-obstante clause provided in sub-section (1) above, Section 66B, which is the charging section under the Act of 1994 is overridden. Similarly, sub-section (3) supra, also has the overriding effect, over all other provisions of Chapter V of the Act of 1994. In other words, the legislative intent behind insertion of Section 103 in the Act of 1994 was to keep the service mentioned therein, outside the purview of levy of service tax, even though Section 66B ibid mandates that levy of service tax shall be on all services provided in the taxable territory. Further, the effect of the other provision i.e., sub-section (3) in Section 103 ibid is that, while interpreting the said provision, then there is no scope for consideration of Chapter V of the Act of 1994, which, inter alia, deals with the provision for claim of refund, being made inapplicable for the purpose of said Section 103 ibid; because of such non-obstante clause. Therefore, in the circumstances of the present case, the refund claim filed by 70 ST/87410/2018 the appellants need to be examined only on the touchstone of Section 103 of the Act of 1994, which is a complete code in itself and no further conditions can be added or subtracted to it.
14.1 However, it is observed that the learned Commissioner (Appeals) in the impugned order as well as the Referral Bench, more specifically the learned Member (Technical) at paragraph 4.7, in the Interim Order No. 4/2021 dated 28.06.2021, have held that the refund claim filed by the appellants needs to be determined in terms of Section 83 of the Act of 1994 read with Section 11B and 12E of the Central Excise Act, 1944 (for short, 'the Act of 1944') and Rule 3 of the Service Tax Rules, 1994 (for short, 'the Rules 1994') , read with Rule 3 of Central Excise Rules, 2002. Since, the provisions of Section 11B of the Act of 1944 were discussed for consideration of the refund application filed by the appellant, the salient features of such statutory provision need to be discussed, and accordingly, are discussed in the following sub-paragraphs.
14.2 The provision for claim of refund of Central Excise duty is contained in Section 11B of the Act of 1944. Section 83 of the Act of 1994 mandates that certain provisions of the Act of 1944 shall apply, so far as may be, in relation to service tax, as they may apply in relation to duty of excise. For the purpose of refund of service tax, Section 83 of the Act of 1994 has borrowed the provisions of Section 11B from the Act of 1944. Therefore, for claim of refund of service tax, the provisions of Section 11B ibid shall apply mutatis mutandis. The said statutory provision is quoted herein below:
"Section 11B. (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 :...
(2) If, on receipt of any such application, the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise is satisfied that the whole or any part of the duty of excise and interest, if any, paid on such duty paid by the applicant is refundable, he may make an order accordingly and the amount so determined shall be credited to the Fund:..."
71 ST/87410/2018 14.3 On reading of the above quoted statutory provision, it transpires that 'no specific person' (either the service provider or the service receiver) has been defined therein, who can lodge the refund claim before the competent authority under the statute. This fact is evident from use of the phrase 'any person', who can file the refund application, claiming refund of excess paid service tax. Thus, I am in agreement with the observations made by the learned Commissioner (Appeals) that the appellants, as the recipient of service, are permitted under the statute to file the refund claim application. Both the learned Members in the referral Bench have also agreed upon such view expressed by the learned Commissioner (Appeals).
14.4 On careful reading of the provisions contained in Section 11B of the Act of 1944, it transpires that the issue of jurisdiction of the Service Tax authority, before whom, the refund application has to be filed, as dealt with in the impugned order, is not in conformity with the statutory provisions. Learned Commissioner (Appeals) has held that the service recipient has to file the refund application before the proper officer, having jurisdiction over the registered service provider, where the duty/tax is supposed to have been paid. In support of such contention, the impugned order has referred to Chapter 9, dealing with the subject matter of 'Refunds', contained in the 'Manual of Supplementary Instructions' issued by CBEC in 2001 and edited in 2005. The said Manual was issued by CBEC, for maintaining consistency with the provisions of the Act and the Rules, and for better understanding or for the benefit of trade, industry and the Central Excise field formations. In the Preface dated 17.05.2005 to such instructions, the Under Secretary to the Government of India has clarified that 'if the readers find any instruction in the said Manual, which are contrary to the provisions of the Central Excise Act, 1944 and the rules made thereunder, then such Act and Rules shall prevail'. Since, there is no ambiguity in reading of Section 11B ibid, it cannot be said that as per the Supplementary Instructions, the jurisdiction to deal with refund application lies with the authority at the service provider's end alone.
14.5 On bare reading of the provisions of Section 11B of the Act of 1944, it would transpire that the designated authority, before whom the refund application is required to be filed, has only mentioned in the said statute, as the 'Assistant Commissioner of Central Excise or Deputy Commissioner of 72 ST/87410/2018 Central Excise'. The provisions of the said statute do not provide any thing further, as to who would be the jurisdictional designated authority, before whom the said refund application is to be preferred i.e., whether before the designated authority, having jurisdiction over the business premise(s) of the service recipient; or, the authority at the service provider's end. Since, the provisions contained in Section 11B of the Act of 1944, with regard to jurisdiction of the designated authority has been clearly spelt out, without any ambiguity; different interpretation cannot be placed to hold that in case of refund of service tax, the proper authority would be only the designated authority at the service provider's end.
15. It is made clear that the provisions of Section 11B of the Act of 1944 were discussed herein above, only for the purpose that the same were considered in the impugned order and by the Referral Bench. However, in the present case, for filing of the refund claim, the cause of action arose, only owing to the reason of insertion of Section 103 in the Act of 1994, wherein exemption from payment of service tax on certain specific services were provided by way of grant of refund of service tax already paid. Thus, the provisions of Section 103 ibid alone have to be considered for ascertaining the issue, whether the appellants are entitled to refund of service tax or otherwise.
16.1 I find that the Learned Commissioner (Appeals) has endorsed the views expressed by the original authority in returning the refund claim application to the appellants. On the contrary, there is nothing contained in Section 103 of the Act of 1994, providing for return of the refund application to the claimant. The said fact is evident from a reading of sub-section (3) of Section 103 of the Act of 1994, providing that 'an application for claim of service tax shall be made within a period six months from the date of which the Finance Bill, 2016 receives the assent of the President'. Since, the statute has only provided the time line for consideration of the refund application, then the designated authority, empowered to deal with refund application, has to only look into the such time line aspect and if the amount of service tax has already been paid according to his satisfaction, then necessary order was required to be passed, in sanctioning the refund claim amount. In view of the fact that no provisions exist in Section 103 of the Act of 1994, for returning the refund application to the claimant, in my 73 ST/87410/2018 considered view, such action on the part of the original authority, which was subsequently endorsed by the first appellate authority, would not stand the scrutiny of law.
16.2 I find that the original authority, while returning the refund application to the applicants, had stated in his letter dated 08.12.2016 that the service tax, for which the refund application was preferred, had not been paid by the appellants into the account of Service Tax-VII Commissionerate, Mumbai; but the same had been paid by the service provider at Service Tax, Kolkata Commissionerate; and thus, the refund claim cannot be entertained at his end. I find that such interpretation placed by the authority below is not in consonance with the statutory provisions. Rule 6 of the Rules of 1994, deals with the issue of payment of service tax by an assessee. It has been mandated that the service tax shall be paid to the credit of Central Government. In context with the manner and mode of deposit of indirect taxes into the Central Government account, the Principal Chief Controller of Accounts in the CBEC, has prepared the 'Manual of Accounting of Indirect Taxes'. In Chapter 4 of the said Manual, different classifications have been made for revenue collection and accounting thereof. The Major Heads provided for receipt of Customs duties, Central Excise and Service Tax are classified under the Heads 0037, 0038 and 0044 respectively. The facts are not under dispute that for provision of the taxable service, the service tax amount was paid by the service provider M/s. ITD and the same was credited into the Central Government account under the Major Head 0044, with the minor head provided for the specific class of the taxable service. Since, the challan depositing the tax amount had specified such heads of account; the same was credited into the Central Government account and not in the account of any specific Commissionerate. In other words, no heads of account have been assigned or provided on Commissionerate-wise for collection and retention of the Government revenue. Any amount considered for refund by the designated authority, in any Commissionerate, should be drawn from the common pool of the Government of India and such amount should be deducted from the Minor Head (under the Major Head), provided for individual category of taxable services as 'Deduct Refunds', to be maintained in the prescribed records by the refund sanctioning authority. Therefore, it is improper to say that service tax payment made into the Government account through Kolkata Commissionerate cannot be claimed by way of filing the refund application 74 ST/87410/2018 before the Service tax authorities at Mumbai, on whose jurisdiction, the appellants are duly registered with.
17.1 Learned Member (Technical) at paragraph 4.6 in the Interim Order dated 28.03.2021 has placed reliance on the following judgements, to conclude that the appellants should not be entitled for refund under Section 103 of the Act of 1994:
(i) Commr. of C. Ex. & S.T., Rajkot Vs Essar Bulk Terminal Salaya Ltd. -
2018 (363) E.L.T. 262 (Tri. -Ahmd.)-[Affirmed by Hon'ble Gujarat High Court, reported in 2019 (25) GSTL 521 (Guj)].
(ii) JSW Dharamatar Port Pvt. Ltd. Vs Union of India - 2019 (20) GSTL -
721 (Bom.)
(iii) MDP Infra (India) Pvt. Ltd. Vs Commissioner of Customs, C. Ex. & CGST - 2019(29) GSTL - 296 (M.P.).
I have examined the above judgements relied upon by the Learned Member (Technical). On reading of the contents in the said judgements, I find that the Hon'ble High Courts have held that the limitation prescribed under Section 103 of the Act of 1994 cannot be ignored, while considering the refund application filed by the claimant. In the present case, the appellants have indeed filed their refund claim applications within the time prescribed under Section 103 of the Act of 1994 and such fact has not been disputed by the department. Thus, reliance on these judgements is not relevant for consideration of the present dispute.
17.2 In paragraphs 4.8 to 4.10 of the Interim Order, reference has been made by the learned Member (Technical) to the judgement of the Hon'ble Supreme Court, in the case of Canon India Pvt. Ltd. Vs. Commissioner of Customs-2021 (376) E.L.T. 3 (SC), to justify that the phrase 'Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise', used in Section 11B of the Act of 1994 is to be interpreted as the 'proper officer', with whom the ST-3 returns, in respect of which the refund claim has been made, was filed. In this context, he has placed reliance on the said judgment to derive the ratio that the phrase 'Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise', is preceded by the definite article i.e., 'the' and not the indefinite articles 'a or an'.
In the Civil Appeal No. 1827 of 2018 filed by Canon India Pvt. Ltd. (supra) before the Hon'ble Supreme Court, the issue was whether, after clearance of the goods upon availment of duty exemption provided under 75 ST/87410/2018 notification, can the proceedings be initiated by the Directorate of Revenue Intelligence (DRI) for recovery of non-paid duty under Section 28(4) of the Customs Act, 1962. The phrase/article 'the' used before the noun 'proper officer' in the said sub-section was interpreted by the Hon'ble Supreme Court, holding that article 'the' is called the Definite Article, because it points out and refers to a particular person or thing; as against the article 'a/an', which is not specific to a particular person. Thus, the legislative intent behind such statutory provision was clarified by the Hon'ble Court that the designated proper officer alone can issue the show cause notice and the said action cannot be initiated by the officers of DRI. While holding such view, the Hon'ble Supreme Court have also referred to the definition of 'proper officer', contained in Section 2(34) of the Customs Act, 1962.
17.3 On a conjoint reading of both the statutes i.e., the Act of 1962 and the Act of 1944, it would reveal that the phrase 'proper officer' has been defined in the former statute, but not in the later statute, and that Section 11B contained in the later statute has also not considered such phrase of 'proper officer', and has only referred to the phrase 'Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise', without particularising the jurisdiction. Thus, I am of the considered view that the issue involved in the present case is distinguishable from the above judgment relied upon by the learned Member (Technical).
17.4 In the present case, due to non-obstante clause in Section 103 (1) of the Act of 1994, the charge of service tax itself and the assessment, if any, stands nullified by the legislated Act of the Parliament and thus, there is no need of ascertaining the fact, as to who would be considered as the jurisdictional proper officer for grant the refund of the service tax amount. In fact, Section 103(2) of the Act of 1994 mandates that refund shall be made of all such service tax, which has been collected, but which would have not been so collected, had sub-section (1) been in full force at all times. As mentioned earlier, Section 103 of the Act of 1994 is a complete code in itself and it does not mandate for filing of the refund claim at any specified jurisdiction. Once it is admitted that the recipient of the service is eligible to file refund claim, it is beyond the mandate of the law to insist that such claim should be filed with the proper officer, having jurisdiction over the service provider. Further, Section 103(3) of the Act of 1994 also starts with a non-obstante clause and puts only condition that the refund application 76 ST/87410/2018 should be filed within six months. Thus, there is no other condition imposed, as to the specific officer, before whom the refund claim should be filed with.
17.5 The appellants in the present case have filed their refund claim before their own jurisdictional Service Tax divisional office, where they used to file the service tax returns. Even Section 11B of the Act of 1944, which has been strongly relied upon in the Interim Order, also does not mandate that the claim should be filed before the service provider's jurisdictional officer alone. In fact, the principle laid down in Canon India (supra) would support the appellant's case inasmuch as in the event of any erroneous grant of refund, the proper officer to issue the show cause notice for recovery of such erroneously granted refund would be the jurisdictional officer at the appellant's end, and not the jurisdictional officer at the service provider's end. Thus, as per the reasoning given by the Hon'ble Member (Technical), the jurisdictional officer of the service provider will not have even geographical jurisdiction to issue any show cause notice to the appellants herein. Therefore, the expression 'the assessing officer', in the present case, would mean the jurisdictional officer of the appellants, and not that of the service provider. In any case, the appellants would not have any locus standi to file their refund claim before the jurisdictional officer of the service provider, as they are not registered in that jurisdiction.
17.6 Further, in paragraph 4.16 and 4.17 of the Interim Order, reference has been made by the learned Member (Technical) to the judgments of the Hon'ble Supreme Court, delivered in the cases of:
(i) Mafatlal Industries Ltd Vs. Union of India, 1997(89) ELT 249 (SC)
(ii) Collector of Central Excise, Kanpur Vs. Flock (India) Put Ltd, 2000 (120) ELT 285 (SC)
(iii) Priya Blue Industries Ltd. Vs. Commissioner of Customs (Preventive), 2004 (172) ELT 145 (SC)
(iv) ITC Ltd Vs. Commissioner of Central Excise, Kolkata-IV - 2019 (368) ELT 216 (SC) 17.7 The ratio in Mafatlal Industries (supra) is that, for an assessee to claim a refund, he should have challenged his own assessment and cannot seek to rely on the benefit granted by any court in some other assessee's case. First of all, the Hon'ble Supreme Court in Mafatlal Industries (supra), itself clarified that this ratio will apply where duty is paid on account of mis-
77 ST/87410/2018 construction, mis-application and wrong interpretation of a provision of law, rule, notification or regulation and will not apply where the levy itself is held to be unconstitutional. In the present case, the levy itself is removed by an act of the Parliament and hence the ratio of Mafatlal Industries (supra) may not apply to the present case. Also, the other ratio emanating in Mafatlal Industries (supra) is that the assessee cannot invoke provisions of Section 72 of the Contract Act, 1872 ("1872 Act") or Section 17(1)(c) of the Limitation Act, 1963 ("1963 Act"), based on favourable judgement in someone else's case and file the refund within 3 years of the discovery of mistake. In other words, the Hon'ble Court have held that mandate of limitation provided under Section 11B of the Act of 1944 cannot be ignored.
The judgements in the cases of ITC, Flock and Priya Blue (supra) were relied upon by the learned Member (Technical), to emphasize that in order to be eligible for refund, one need to adhere to the provisions of Section 27 of the Customs Act, 1962 strictly. In the present case, interpretation of the provisions of Section 27 (supra) is not in question and there is no dispute that the appellants have filed the refund claim within 6 months of the Presidential assent to Section 103 of the Act of 1994 and as such, is within the schedule time frame. Thus, recourse cannot be had to the provisions of 1872 Act or the 1963 Act.
17.8 Further, in Paragraph 4.22 of the Interim Order, reference has been made by learned Member (Technical) to the judgments of (i) Kerala State Electronics Corporation vs Collector of C. Ex. Kochi, 1996 (84) ELT 44 (Tribunal); (ii) Commissioner of Central Excise & Customs vs MDS Switchgear Ltd, 2008 (229) ELT 485 (S.C.) and (iii) Commissioner of Central Excise, Pune-III vs Ajinkya Enterprises, 2013 (294) ELT 203 (Bom.), to hold that while examining the admissibility of cenvat credit to the recipient, the officer so examining cannot question the assessment made at the time of provision of service or sale of goods. I am of the opinion that the cited judgements have no relevance in the present case inasmuch as the charge of service tax was ab initio deleted by an act of Parliament, and thus, there is no need of putting up any challenge to the assessment. In the present case, the appellants are not seeking to change or challenge any assessment at the supplier's end. The appellant's right to seek refund arose out of an act of the Parliament, by way of granting retrospective exemption, which overrides all assessments and hence, there is no question or need for seeking any re-assessment.
78 ST/87410/2018 17.9 In paragraph 4.24 of the Interim Order, it is stated by the learned Member (Technical) that any exemption from the tax is an exception and needs to be claimed by the person, who wishes to avail the benefit of such exemption. In this context, the judgment of the Hon'ble Supreme Court, delivered in the case of Commissioner of Central Excise, New Delhi vs Hari Chand Shri Gopal, 2010 (260) E.L.T. 3 (S.C.) was referred to by him. On reading of the said judgment with reference to the case in hand, I am of the view that ratio of such judgment cannot be applied, in the light of deletion of the levy itself, by Section 103 of the Act of 1994 inasmuch as there is no question of any person, claiming any exemption, when the levy itself is deleted by an act of the Parliament. Once the levy stands deleted, such deletion will apply universally and there is no need for any individual person in claiming exemption with respect thereof. It is important to note that Section 103 of the Act of 1994 does not require that refund be claimed at a particular location and insistence of such condition by the field formation, would amount to inserting words in the legislation, which is not permitted in law. It is an undisputed fact on record that the appellants had otherwise complied with all the conditions of Section 103 of the Act of 1994.
17.10 At paragraph 4.25 in the Interim Order, reference has been made by learned Member (Technical) to compliance aspects contained in Rule 6 of the Rules of 2004.On reading of the said statutory provision, it transpires that the responsibility of such compliance has been fixed on the service provider and not on the receiver of the taxable service, i.e., the appellants herein. Further, Section 103 of the Act of 1994 does not warrant compliance with respect to such rule by the appellants. Assuming that such compliance is warranted, then the jurisdictional officer at the appellant's end ought to have sought for such report of compliance, either from the appellants or from the jurisdictional officer at the service provider's end. Such instances of the jurisdictional officer, seeking compliance from his counterpart in other jurisdictions, are not unknown to the field formation. For example, in the case of movement of goods under Chapter 'X' procedure, in the Central Excise regime, or in the case of variance of credit under assessment, in terms of Rule 57E of the erstwhile Modvat Credit Rules, such compliance was often obtained. Therefore, in the absence of authority to seek such compliance, denial of the benefit of refund at the appellant's end, is not at all justified in law; as it amounts to adding a condition to an Act, legislated by the Parliament, which is not permitted. In any case, denial of 79 ST/87410/2018 the benefit of refund claim by the authorities below, is not in context with non-compliance of the requirements of Rule 6 of the Rules of 2004 by the service provider and thus, the Tribunal at this stage, cannot make out a new case for denial of the benefit of refund, which was never been canvassed in the proceedings, ultimately lead to this appeal.
17.11 I find that in paragraph 4.28 of the Interim Order, learned Member (Technical) has distinguished the judgements cited before him, concerning the issue in hand. It is a settled principle of law that the Bench of the same strength, cannot sit in judgement of the cases cited before it, and if it disagrees with any judgement cited, then the only recourse left for the Bench is to refer the matter to the President of the Tribunal, for constitution of a Larger Bench, for redressal of such dispute. In any case, with great respect, I want to express my views that the manner, in which the cited judgements were distinguished, is not in consonance with the statutory provisions vis-à-vis, the judicial pronouncements. For example, the judgement in the case of Indian Farmer Fertiliser Coop Ltd Vs. CCE Meerut- II, 2014(35) STR 422 (Tri-Del.), affirmed by the Hon'ble Allahabad High Court in 2014(35) STR 492 (All.) is distinguished on the ground of it being sub silentio. In the said decided case, the assessee had first filed the refund claim in the jurisdiction of the service provider, which was rejected and then the assessee filed its claim with own jurisdictional officer and it was sanctioned. Revenue in an appeal before Commissioner (Appeals) did not challenge the jurisdiction, but put a challenge only on the ground that the recipient is not entitled to claim refund. Thus, Revenue department having accepted filing of refund claim in service recipient's jurisdiction in one case, cannot take a different view for the present appellants. Further, the Hon'ble High Court did not allow Revenue to take up a limitation argument on the basis that it was not argued before the Tribunal. Applying the same analogy, not having argued on jurisdiction before learned Commissioner (Appeals), Revenue is now prevented from arguing that point in case of another assessee i.e., the appellants herein.
17.12 In paragraph 4.29 of the Interim Order, Member (Technical) has placed reliance on the judgement of Hon'ble Supreme Court in the case of Mafatlal (supra). On reading of the said judgement, it was observed that the Hon'ble Court in the said case, had dealt with the validity/legality of the 1991 Amendment Act and not considered the issue of jurisdiction of the officer, before whom the refund claim should be filed. It is a settled principle 80 ST/87410/2018 of law, that the judgement is the ratio on what it decides and not what can be deduced from it. It is to be noted from the finding reproduced in paragraph 4.29 of the Interim Order that those are the comments of the Hon'ble Court, while negating the submissions made before them and not the ratio of the judgement on the issue before the Hon'ble Court.
17.13 In the case of Chambal Fertilizers & Chem. Ltd., vs Commr. of C. Ex. & S.T., Udaipur 2017 (52) STR 329 (Tri-Del.), the Tribunal had held that there is no bar in filing refund claim in the jurisdiction of service recipient and this order of the Tribunal has been upheld by the Hon'ble Rajasthan High Court [2018(15) GSTL 6576 (Raj.)]. However, Member (Technical) has interpreted such judgement in the manner that the Tribunal's order cannot be accepted. On reading of the said judgement of the Hon'ble Rajasthan High Court, it transpires that Government was given with the suggestion that if the assessee is allowed to file refund claim at two offices, it may lead to wastage of time in verification of the details of payment made and therefore suggested that filing of the claim can be kept with the office of the jurisdictional Commissioner for administrative convenience. The said observation by the Hon'ble Court is only a suggestion given to the government and thus, no ratio can be drawn to consider the present issue differently. On the contrary, the issue framed in the said appeal was answered in considering the view taken by the Tribunal.
17.14. In paragraph 4.31 of the Interim Order, the judgement of Oswal Chemicals & Fertilisers vs Commissioner of C. Ex., Bolpur, 2004 (164) ELT 89 (Tri-Del.) was referred to by learned Member (Technical). It has been held that the purchaser of goods could not have filed refund claim before his jurisdictional officer and it is stated that this order has been upheld by the Hon'ble Supreme Court at 2015 (318) ELT 617 (SC). However, this understanding, in my considered view, is not proper. The Hon'ble Supreme Court, in Paragraph 9 have held that the Tribunal's understanding that the refund was filed with purchaser's jurisdiction is incorrect and therefore, the Hon'ble Court had no occasion to give any ruling on this aspect of the controversy.
17.15 In paragraph 4.32 of the Interim Order, learned Member (Technical) has observed that Section 103 of the Act of 1994 or Section 11B of the Act of 1944, did not permit for filing of the refund claim in multiple 81 ST/87410/2018 jurisdictions. In the present case, it is not the case of the appellants that they wanted to file the claim in multiple jurisdictions. The appellants have in fact, filed the refund claim application only with their jurisdictional officer. Therefore, this finding is of no relevance in the present context. In fact at the end of this paragraph, it is stated that we have no hesitation in agreeing to the observations made by the Tribunal to the effect that both the jurisdictions cannot refuse to entertain the refund claim filed by the recipient of service. If this be so, then the appellants are correct in filing the claim with their own jurisdiction. It is also stated in the said paragraph that filing of claim in multiple jurisdictions, will amount to double benefit in respect of the same transaction. In the present case, the appellants have filed the claim only in one jurisdiction and in any case, it is not the case of Revenue or of the Adjudicating or First Appellate Authority that the appellants is taking double benefit. Such a remark is unwarranted in the present case.
18. In view of the foregoing discussions, I am in agreement with the learned Member (Judicial) that the impugned order is required to be set aside and the appellants should be entitled to get the refund at Mumbai.
19. Registry is directed to place the Order before the Regular Bench for recording of the majority order.
(Order pronounced in open court on 05.07.2023)
(S.K. Mohanty)
Member (Judicial)
SM
82 ST/87410/2018
MAJORITY ORDER
PER : CORAM
20. In view of the majority opinion, the impugned order is set aside and the appeal is allowed in favour of the appellants.
(Dictated and pronounced in open court on 29.10.2024) (S.K. MOHANTY) MEMBER (JUDICIAL) (M.M. PARTHIBAN) MEMBER (TECHNICAL) sm