Custom, Excise & Service Tax Tribunal
Wave One Private Limited vs Delhi East on 25 August, 2025
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI
PRINCIPAL BENCH - COURT NO. 4
Service Tax Appeal No. 50261 of 2025
(Arising out of Order-in-Appeal No. 07/ST/DLH/2024 dated 29.01.2024 passed
by the Commissioner, Central Tax, Goods & Service Tax, Central Excise, New
Delhi)
M/s Wave One Private Limited Appellant
M-4 Mezzanine Floor,
South Extension Part-II
New Delhi-110049.
Versus
Commissioner, Central Tax, Goods & Service Respondent
Tax, New Delhi Central Excise, CR Building, I.P. Estate, New Delhi And Service Tax Appeal No. 50262 of 2025 (Arising out of Order-in-Appeal No. 06/ST/DLH/2024 dated 29.01.2024 passed by the Commissioner (Appeals), Central Tax, Goods & Service Tax, Central Excise, New Delhi) M/s Wave One Private Limited Appellant M-4 Mezzanine Floor, South Extension Part-II New Delhi-110049.
Versus Commissioner, Central Tax, Goods & Service Respondent Tax, New Delhi Central Excise, CR Building, I.P. Estate, New Delhi Appearance:
Present for the Appellant: Shri A.K. Batra, Chartered Accountant Present for the Respondent: Shri Kuldeep Rawat, Authorized Representative CORAM:
Hon'ble Dr. Rachna Gupta, Member (Judicial) Date of Hearing : 05/08/2025 Date of Decision : 25/08/2025 Final Order Nos. 51214-51215/2025 2 ST/50261-50262/2025 Dr. Rachna Gupta:
The present order disposes of two appeals pertaining to the same appellant and involving the same issue. The details of appeals are as follows:
Appeal No. Show Cause Order-in- Order-in-Appeal Period in Refund
Notice No. Original No. dispute amount in
No. dispute
ST/50261/2025 33/2022 19/2022-23 07/2024 dated March, 2018 16,93,099/-
dated dated 29.01.2024
18.10.2022 10.03.2023
ST/50262/2025 33/2022 20/2022-23 06/2024 dated 2018-19 18,19,633/-
dated dated 29.01.2024
18.10.2022 10.03.2023
2. M/s Wave One Private Limited1 is registered with service tax department for providing services as that of construction service other than the construction of residential complex and works contract services. The appellant had to develop a commercial project under the name of "Wave One" comprising of office space and retail space for New Okhla Industrial Development Authority2 on the land allotted by the said authority. In order to discharge its service tax liability, the appellant had charged service tax on the invoices/RA bills so raised to the customers and deposited the amount with the Government exchequer. However, during March 2018, various customers cancelled their bookings resulting into cancellation of the respective demand notes/RA bills. The corresponding credit notes were issued, due to this event which occurred after coming into effect of Central Goods and Service Tax Act, 2017 that the appellant filed refund claim on 30th March 2022 for refund of the amount of service tax of Rs. 16,93,099/- as was 1 the appellant herein 2 NOIDA 3 ST/50261-50262/2025 paid by them before the said cancellation. However, following deficiencies were observed:
(a) The appellant has not submitted the said refund claim within one year as per Section 11B of the Central Excise Act, 1944 in respect of claim mentioned above;
(b) The appellant has claimed refund of Rs. 16,93,099/- said to have been paid to the Government through GAR 7 challans but certified copy of the challans as proof of tax payment have not been provided;
(c) The relevant ST-3 returns have also not been submitted;
(d) Documentary proof that the amounts have been refunded back to the buyers who cancelled bookings have not been submitted/
2.1 Based thereupon, the refund claim was proposed to be rejected vide the Show Cause Notice No. 34/2022 dated 18.10.2022. The said proposal has been confirmed vide Order-in- Original No. 19/2022-23 dated 10.03.2023, however, based on one of the noticed deficiency only i.e. the refund was rejected being time-barred. Appeal against the said order has been rejected vide Order-in-Appeal No. 32-ST/2023 dated 29.01.2024. Being aggrieved, the appellant is before this Tribunal. 2.2 Learned counsel for the appellant has mentioned that since the appellant's customers cancelled their booking with respect to the purchase of properties to be constructed by the appellant in their project "Wave City", the appellant had not rendered any service to the said buyers in respect of agreements with the said 4 ST/50261-50262/2025 buyers. The amount which was collected from the said buyers against the demand notes as service tax of Rs. 16,93,099/- was deposited by the appellant. Subsequent to cancellation, the credit notes were issued by the appellant. The said event has held appellant entitled for claim of refund of aforesaid amount for Rs. 16,93,099/-. Accordingly, the claim in question was filed in terms of Section 142(5) of CGST Act (cancellation occurred subsequent to introduction of GST in the month of April 2018 - March 2019). Learned counsel for the appellant has mentioned that none of these facts are in dispute. Also that the authorities below have wrongly rejected the refund claim invoking one year limitation prescribed under Section 11B of Central Excise Act. While relying upon the following decisions, learned counsel for the appellant prayed for setting aside the impugned order and for the appeal to be allowed:
(i) M/s Jai Maheshwaari Steels Pvt. Ltd. Vs. Commissioner, CGST, Dehradun3;
(ii) M/s Rattan India Power Ltd. Vs. Commissioner of Customs, Central Excise & Central GST, Delhi4;
(iii) M/s Credence Property Developers Pvt. Ltd. Vs. Commissioner of CGST & Central Excise, Mumbai East5;
(iv) M/s Uppa Chadha Hitech Developers Pvt. Ltd. Vs. Commissioner (Appeals-1), CGST & Central Excise, Delhi6;
(v) M/s Wave One Pvt. Ltd. Vs. Commissioner CGST & Central Excise, New Delhi7.
3. While rebutting these submissions, learned Authorized Representative for the department has submitted that refund claim has not been rejected merely being barred by time but also for the 3 2022 (3) TMI 49 - CESTAT New Delhi 4 2022 (5) TMI 651-CESTAT New Delhi 5 2023 (1) TMI 252 - CESTAT Mumbai 6 Dated 20.01.2024 CESTAT New Delhi 7 Dated 31.10.2023 CESTAT New Delhi 5 ST/50261-50262/2025 reason that the appellant has been unjustly enriched. It is submitted that since the refund claim has been filed in terms of Section 11B of Central Excise Act it should have been filed within one year of the payment of service tax. Apparently, the claim was filed much later hence there is no infirmity rejecting the claim on the ground of limitation. Learned Departmental Representative has also relied upon the decision of Hon'ble Apex Court in the case of ITC Ltd. Vs. Commissioner of Central Excise, Kolkata 8 and BT (India) Pvt. Ltd. Vs. Union of India & Ors9. To impress upon that the assessment order has to be modified prior filing the refund claim of the amount of tax paid. Since the assessment has not been modified, the refund claim is not sustainable. The appeal is prayed to be dismissed.
4. Having heard both the parties, the rival contentions thereof and from the perusal of record of both the appeals, it is observed to be an admitted fact that the appellants had initially collected the service tax from the customers who booked the office or retail space in the building which was to be constructed by the appellants for NOIDA. The said service tax was duly deposited by the appellant with the department. However, prior the appellant could construct the premises for the customers many of them cancelled the bookings. There is no denial that the amount received by the appellant including the amount of service tax, the appellant issued the credit notes. These admitted facts are sufficient to show that the services of construction as were agreed to be provided by the appellant to its customers were never provided by the appellant. 8 2019 (368) ELT 265 (SC) 9 WP(C) No. 13968/2021 (MANU/DE/7485/2023) 6 ST/50261-50262/2025 Thus Article 265 forbids the Government from making any unlawful levy or collecting taxes unlawfully. The bar is absolute. It protects the citizens from any unlawful extraction of tax. The Government cannot be permitted to levy any tax without authority of law and if any tax has been collected/deposited must be restored to the person from whom it was collected.
5. These observations are sufficient to hold that the appellant was not liable to pay the service tax which was otherwise deposited by the appellant. Apparently, the amount so deposited is liable to be refunded to the appellant. I further observe that the refund claim for the said amount when filed by the appellant has been adjudicated by the original adjudicating authority on four different counts:
1) Whether the assessee has filed their refund claim with the correct jurisdictional authority.
2) Whether the assessee has filed their refund claim within the period of one year as required under section 11B of the Act as applicable in service tax matters also.
3) Whether the refund claim is admissible to the assessee.
4) Whether any unjust enrichment is involved in this case or not.
6. Out of these four issues framed by the original adjudicating authority three issues have been decided in favour of the appellant
- assessee holding that the claim has been filed before the correct jurisdictional authority, the appellant is very much eligible for the 7 ST/50261-50262/2025 refund and that no issue of unjust enrichment is involved in this case. The refund claim has still been rejected only on one issue i.e. of time bar holding that the refund claim has not been filed within one year as is required under section 11B of the erstwhile Central Excise Act. Those findings have fully been endorsed and upheld by the Commissioner (Appeals) vide the impugned order under challenge. In the light of these observations, the narrow point of adjudication for the present appeal is "Whether the refund claim in the given set of circumstances where it has been filed after introduction of CGST Act gets hit by principle of limitation."
7. For the purpose, the relevant provision of the CGST Act section 142 (5) is foremost perused under which the impugned claim has been filed. It reads as follows:-
(5) Every claim filed by a person after the appointed day for refund of tax paid under the existing law in respect of services not provided shall be disposed of in accordance with the provisions of existing law and any amount eventually accruing to him shall be paid in cash, notwithstanding anything to the contrary contained under the provisions of existing law other than the provisions of sub-
section (2) of section 11B of the Central Excise Act, 1944. (1 of 1944).
8. The bare perusal makes it clear that under Section 142(5) of CGST Act, 2017 the refund claim of service tax paid under the existing law (Central Excise Act, 1944) in respect of services not provided shall be disposed of under the existing law and has to be paid in cash. It states that such refund is subject to provisions of sub-section (2) of section 11B of Central Excise Act, 1944 (CEA) only. Thus it is only in case of unjust enrichment to the appellant that he can be denied the refund of the amount which was available 8 ST/50261-50262/2025 to him under existing/ erstwhile law. In the present case, refund has been rejected on the ground of being filed beyond the period of one year as stipulated in sub-section (1) of section 11B of CEA. The contract for providing service having been annulled in March, 2018 it cannot be expected of the appellant to file the refund claim within a period of one year from the date of payment of service tax in Financial Year 2010-16. Further, section 142(5) expressly states that the limitation provided in sub-section (1) of section 11B of Central Excise Act, 1944 is not applicable.
9. Further it is observed that the appellant was eligible for Cenvat Credit of the amount paid in terms of Rule 6(3) of the erstwhile statute had there been no cancellation of the contract for providing the service as already observed above, the adjudicating authority below have held that the assessee in the present case has not been unjustly enriched. These observations are sufficient for me to hold that section 11B of erstwhile Act cannot at all be invoked, specifically the time bar therein, to rejected the refund claim as was filed under section 142 (5) of the CGST Act.
10. Further, I find that the words "notwithstanding anything contrary contain in said law" means that the provisions of this Section will prevail over provisions of existing law except provision of Section 11B(2) of Central Excise Act, 1944. The Section 11B(2) of Central Excise Act, 1944 contains provisions relating to granting of refund in case of unjust enrichment. In view of said non- obstante clause Section 11B(1) of Central Excise Act cannot be the criteria for rejecting refund claim post introduction of CGST Act (Section 142 thereof) 9 ST/50261-50262/2025
11. Coming to the plea raised on behalf of the Department as has been mentioned in the order under challenge holding that since the amount was paid to the Government as service tax it is section 11 B of CEA, having a prescribed time limit, only shall be applicable. I observe that the tax liability arises towards an amount received for providing a service in the case when the service is either provided or is to be provided. In the present case from the apparent admission for the fact that the agreement for providing service was got cancelled at the stage when no service was yet provided, there remains no scope for any service to be provided in future. Thus, there remains no occasion for any tax liability on the appellant and no authority with the Government to collect such an amount. In view thereof and in view of Article 365 of Constitution of India, the authority cannot retain the said amount. I draw my support from the decision of Hon'ble Supreme Court in the case of Collector of Central Excise, Chandigarh vs. M/s. Doaba Cooperative Sugar Mills Ltd., Jalandhar 10 , Escorts Ltd. v. Union of India11 .
This decision has been relied in the case law referred by the ld. Chartered Accountant for the appellant i.e. Rattan India Power (supra) and Raj Construction (supra). There is no denial to the fact that appellant has paid GST on the forfeited amount.
12. The department has also raised the plea of appellant having unjustly enriched. However, as already observed, there is no apparent denial to the fact that the appellant had issued the credit 10 1988 (37) ELT 487 (SC) = 1988 Suppl. SCC 683 11 [1994] Supp. (3) SCC 86 10 ST/50261-50262/2025 notes of the entire amount collected from the customers including the amount of service tax. The Chartered Accountant of the appellant has also certified the same. The certificate of Chartered Accountant is an admissible document. I rely upon the decision in the case of Vivo Mobile India Pvt. Ltd. Vs. Commissioner, Customs, New Delhi 12 it has been held that when Chartered Accountant certificate of a CA is submitted by an assessee to substantiate that the assesee is not unjustly enriched, then it is for Revenue to establish by evidence that either the certificate issued by CA is wrong /incorrect or that the duty was actually passed on to the buyers. The decision also hold that there is no requirement in law that the certificate should e issued only by the statutory additions for as long as the certificate is issued by a CA it is consistent with accounts such as the financial statement, it should be accepted.
13. The adjudicating authority also has appreciated the said certificate dated 02.03.2021. There is no finding in the said order holding that the appellant had unjustly enriched. Department has not filed an appeal/order in appeal is also silent to that effect. In absence of any evidence from the department falsifying the return of amount of service tax by the appellant to its customers through credit notes. We do not find any reason to hold appellant to have been unjustly enriched.
14. As far as conditions of Section 142(9)(b) of CGST Act, 2017 is concerned, the appellant has fulfilled the said conditions and hence is entitled for refund. As far as new ground taken by the 12 Decided on 17.3.2025 11 ST/50261-50262/2025 Learned Commissioner that the appellant has filed the revised return late is not valid because this ground has not been raised either in the show cause notice or in the Order-in-Original and hence the Commissioner (Appeals) is not justified to invoke a new ground to reject the refund claim. Further, I find that it is a settled law that whenever two options are available, the assessee may choose the option which is more beneficial for them and in the present case the assessee/appellant has chosen to file the refund claim under Section 142(5) of CGST Act, 2017 which has a overriding effect over Section 11B of Central Excise Act, 1944. The appellant did not choose to carry forward the credit in TRAN-1 and preferred to claim cash refund as provided under Section 142(5) of CGST Act, 2017.
15. The decision in the case of ITC India (supra) is also not applicable to the facts and circumstances of the present case where the original adjudicating authority has not disputed the entitlement of the appellant for the refund claim. The claim has been rejected only on the ground of limitation. The said ground is also not sustainable as already discussed above.
16. In the light of the entire above discussion, I hereby set aside both the orders under challenge (both orders in appeal). Consequently both the appeals are hereby allowed.
(Pronounced in open Court on 25.08.2025) (Dr. Rachna Gupta) Member (Judicial) RM