Custom, Excise & Service Tax Tribunal
Bharath Auto Cars Pvt Ltd vs Commissioner Of Central Excise And ... on 20 October, 2015
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: ST/508/2012-SM [Arising out of Order-in-Appeal No. 176-2011 dated 14/12/2011 passed by the Commissioner of Central Excise (Appeals), Mangalore] For approval and signature: HON'BLE SHRI ASHOK K ARYA, TECHNICAL MEMBER 1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3 Whether Their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes BHARATH AUTO CARS PVT LTD KADRI B-S NO. 101, NH-17 KUNTIKANA JUNCITION, MANGALORE 575004 Appellant(s) Versus Commissioner of Central Excise and Service Tax MANGALORE 7TH FLOOR...TRADE CENTRE, BUNTS HOSTEL RD., MANGALORE, - 575003 KARNATAKA Respondent(s)
Appearance:
Mr. Rajesh Kumar, C.A. For the Appellant Mr. Pakshi ajan, A.R. For the Respondent Date of Hearing: 20/10/2015 Date of Decision: 20/10/2015 CORAM:
HON'BLE SHRI ASHOK K ARYA, TECHNICAL MEMBER Final Order No. 22072 / 2015 Per : ASHOK K ARYA Both the parties have been heard.
2. The issue here is non-sanction of refund totalling to Rs 2,02,445/- for the period of July 2007 to November 2008 mainly on the ground that appellant did not make payments of this amount of service tax under protest; when the appellant did not pay under protest, the refund claim filed after the expiry of one year from the relevant date is time barred under provisions of Section11 B of the Central Excise Act 1944.
3. The learned advocate for the appellant says that their payment of service tax in this case has always been under protest expressly or impliedly; it is evident, when they have been sanctioned refund on the same issue for the payments made for the prior period of May 2006 to June 2006. The learned advocate also points out that they have also been sanctioned refund on the same issue for the future period of December 2008 to August 2009. He says that the said refund which is for the period of July 2007 to November 2008 is the middle period for which there was no need to file any express protest, as the payment of service tax for the same service is continuing and every time and again they need not file their express protest.
3.1 The learned advocate for the appellant cites the decision of the Honble Supreme Court in the case of Mafatlal Industries Ltd Vs UOI 1997 (89) E.L.T. 247 (S.C.)]. In this decision, the Honble Supreme Court inter alia stated as below:
83. It is then pointed out by the learned Counsel? for the petitioners-appellants that if the above interpretation is placed upon amended Section 11B, a curious consequence will follow. It is submitted that a claim for refund has to be filed within six months from the relevant date according to Section 11B and the expression relevant date has been defined n Clause (B) of the Explanation appended to sub-section (1) of Section 11B to mean the date of payment of duty in cases other than those falling under Clauses (a), (b), (c), (d) and (e) of the said Explanation. It is submitted that Clauses (a) to (e) deal with certain specific situations whereas the one applicable in most cases is the date of payment. It is submitted that the appellate/revision proceedings, or for that matter proceedings in High Court/Supreme Court, take a number of years and by the time the claimant succeeds and asks for refund, his claim will be barred; it will be thrown out on the ground that it has not been filed within six months from the date of payment of duty. We think that the entire edifice of this argument is erected upon an incomplete reading of Section 11B. The second proviso to Section 11B (as amended in 1991) expressly provides that the limitation of six months shall not apply where any duty has been paid under protest. Now, where a person proposes to contest his liability by way of appeal, revision or in the higher courts, he would naturally pay the duty, whenever he does, under protest. It is difficult to imagine that a manufacturer would pay the duty without protest even when he contests the levy of duty, its rate, classification or any other aspect. If one reads the second proviso to sub-section (1) of Section 11B along with the definition of relevant date, there is no room for any apprehension of the kind expressed by the learned Counsel.
4. The learned A.R. appearing for the department argues that there is no clear cut protest lodged by the appellant when the payment of subject service tax was made for the period of July 2007 to November 2008; when there is no clear protest, appellant needs to abide by the time limit of filing refund claim within one year of the relevant date as prescribed under Section 11 B of the Central Excise Act 1944. The learned A.R. says that when there is no protest on record by the appellant, this refund amounting to Rs 2,02,445/- is time-barred and cannot be sanctioned.
4.1 Learned A.R. also cites the decision of the Honble High Court of Punjab & Haryana in the case of Sarita Handa Exports (P) Ltd Vs UOI [2015(321)E.L.T. 434 (P&H) saying that this decision supports the departments view point and refund application beyond one year can not be accepted as per the provisions of Section 11 B of the Central Excise Act 1944.
5. After considering the facts on record and the submissions of both sides, I am of the considered view that in this case, there was a continuing deemed protest by the appellant for the service tax paid for the subject services namely authorized free services for the automobiles sold under warranty and the charges for the said warranty of services had been taken from the customers at the time of sale/purchase of the vehicles and on which amount sales tax/VAT had been paid to the State Govt Authorities. When the department has already paid the refund amount for the same services for the two periods as the service tax was not chargeable, it is not understood why the department had been insistent on separate written protest for each payment against the said services which were not liable for payment of service tax. The decision of the Honble Supreme Court in the case of Mafatlal Industries Vs UOI (supra) supports the view point of the appellant and this amount of service tax wrongly charged by the department is certainly refundable and the appellant is entitled to this refund of this amount of service tax, which was not due to the exchequer. Consequently, the appeal is allowed with the consequential relief to the appellant.
(Order pronounced in open court) ASHOK K ARYA TECHNICAL MEMBER pnr 5