Gujarat High Court
Ranjeet Singh Choudhary vs Union Of India on 20 April, 2018
Author: Akil Kureshi
Bench: Akil Kureshi, B.N. Karia
C/SCA/66/2018 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION No. 66 of 2018
FOR APPROVAL AND SIGNATURE :
HONOURABLE Mr. JUSTICE AKIL KURESHI
and
HONOURABLE Mr. JUSTICE B.N. KARIA
==============================================================
1 Whether Reporters of Local Papers may be allowed to see the
judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of the judgment ?
4 Whether this case involves a substantial question of law as to the
interpretation of the Constitution of India or any order made
thereunder ?
==============================================================
RANJEET SINGH CHOUDHARY
Versus
UNION OF INDIA
==============================================================
Appearance :
Mr JK MITTAL, Sr Advocate with Mr HARDIK MODH, Advocate for PETITIONER
Mr NIRZAR S DESAI, Advocate for the RESPONDENTS No. 1,2
Mr SUDHIR M MEHTA, Advocate for the RESPONDENTS No. 3,4
==============================================================
CORAM: HONOURABLE Mr. JUSTICE AKIL KURESHI
and
HONOURABLE Mr. JUSTICE B.N. KARIA
20th April 2018
ORAL JUDGMENT (PER : HONOURABLE Mr. JUSTICE AKIL KURESHI)
Petitioner's grievance arises out of the respondent no. 2- Executive Engineer, CPWD, Gandhinagar Central Division, Gandhinagar not releasing the petitioner's security deposit made by Page 1 of 22 C/SCA/66/2018 JUDGMENT the petitioner for execution of a construction contract awarded by the Department to the petitioner.
The facts are as under :
Petitioner is a proprietary concerned and is engaged in the business of construction. The Central Public Works Department, Gandhinagar ["CPWD" for short] awarded a contract for construction of the building for I.I.T., Gandhinagar under an agreement dated 16th June 2014. The petitioner, in the course of execution of work, received agreed payment from the CPWD. At the relevant time, service-tax was payable on such service, and therefore, borne by CPWD which service tax component, the petitioner also deposited with the Service Tax Department. It is, however, undisputed that the Parliament amended the Finance Act, 1994 by insertion of Section 102 on 14th May 2016, but with retrospective effect from 1st April 2015 granting exemption from payment of service tax in certain cases relating to construction of government buildings for the period between 1st November 2015 to 29th February 2016. Section 102 reads as under :
"Section 102 - Special provision for exemption in certain cases relating to construction of Government buildings -
[1] Notwithstanding anything contained in Section 66B, no service tax shall be levied or collected during the period Page 2 of 22 C/SCA/66/2018 JUDGMENT commencing from the 1st day of April 2015 [both days inclusive], in respect of taxable services provided to the Government, a local authority or a Governmental authority, by way of construction, erection, commissioning, installation, completion, fitting out, repaid, maintenance, renovation or alteration of -
(a) a civil structure or any other original work meant predominantly for use other than for commerce, industry or any other business or profession;
(b) a structure meant predominantly for use, as -
[i] an educational establishment;
[ii] a clinical establishment; or [iii] an art or cultural establishment;
(c) a residential complex predominantly meant for self-use or for the use of their employees or other persons specified in Explanation 1 to clause [44] of Section 65B of the said Act;
under a contract entered into before the 1st day of March, 2015 and on which appropriate stamp duty, where applicable, had been paid before that date.
[2] Refund shall be made to 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 the 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."
Page 3 of 22
C/SCA/66/2018 JUDGMENT As per this provision therefore, with retrospective effect, CPWD was not required to pay Service-tax on the construction carried out by the petitioner and the petitioner was not required to recover the same and deposit it with the Department.
In view of this change, the CPWD wrote to the petitioner on 18th May 2016. Referring to the provisions of the said Section 102, it was stated as under :-
"With reference to above cited letter issued by the Office of the Deputy Commissioner, Service Tax Division, AHD-III, copy of the same is enclosed for kind perusal and necessary action. The extract letter in view of Revision in tax structure of service tax is as under :-
...... ...
... ... ...
In light of above, it is confirmed that all the construction of IIT Gandhinagar are exempted from ambit of service tax, as such requested to remit the amount paid by this office by cheque/DD favouring Executive Engineer, GCD, CPWD, Gandhinagar at the earliest please. Your firm is also entitled to seek refund of the already paid service tax from the service tax authority in light of the revision in tax structure. All the relevant copies of gazette notification as well as interpretation of the Authority is herewith.
The service tax paid so far is Rs. 59,24,840/= vide CV 29/20-01-2016 and 01.04.2016."Page 4 of 22
C/SCA/66/2018 JUDGMENT Thus, the CPWD urged the petitioner to apply for refund of the service tax and return it to CPWD. Under such circumstances, the petitioner applied before the Assistant Commissioner of Central Excise & Service Tax, Central Excise & Service Tax Division, Ajmer-
respondent no. 4 herein on 9th August 2016 and claimed refund of service tax amount of Rs. 66,68,294/=. In response to such refund application, the said authority on 22nd August 2016 wrote to the petitioner and asked for certain clarifications. One of the issues raised in such notice was that the petitioner should submit documentary evidence to show that the tax for which the refund has been claimed has not been charged or realized from any person. In response to such communication, the petitioner gave a short reply on 28th September 2016 clarifying that a sum of Rs.
6,86,951/= was deposited by a sub-contractor, and therefore, the petitioner's claim for refund of service tax now stood revised to Rs.
59,81,343/=. On 7th November 2016, the petitioner addressed a further detailed communication to the respondent no. 4-Asstt.
Commissioner of Central Excise & Service Tax, Ajmer in which besides raising legal contention in respect of the refund claim, the petitioner made the following prayer :
[i] Allow the refund claim of Rs. 66,68,294/= on the basis of above submission.
[ii] Noticee may be heard in person before taking any adverse decision in the matter.Page 5 of 22
C/SCA/66/2018 JUDGMENT [iii] Without prejudice to the above, noticee request you to refund a sum of Rs. 66,68,294/= directly to CPWD, IIT, Gandhinagar and in that case, we will not be required to pass refund to CPWD, IIT, Gandhinagar through us."
Thus, under this letter, the petitioner made it abundantly clear that the refund amount is not claimed by the petitioner. Its claim is for and on behalf of the CPWD, IIT, Gandhinagar and the petitioner would have no difficulty, if such amount is directly paid to the CPWD, IIT, Gandhinagar.
The respondent no. 4, however, rejected such refund application by an Order dated 25th November 2016. In such order, his principal objection was on the principle of unjust enrichment.
On merits, he was convinced that the refund of service tax paid is otherwise due and payable. He observed as under :-
"I observed that the taxable services of construction of Housing Building [Phase-I-A] and Student's Hostel [Phase I-A], at permanent Campus of IIT, Gandhinagar, Near Village Palaj, Gandhinagar and also development works i/c parking sheds, W/s, drainage network, pavements, irrigation system, street light, cabling, etc., under a contract entered into before the 1st day of March 2015 have been provided to the awarder of contracts, is the Government Department. This work is being executed by the CPWD which is also a Government Authority. Since the assessee have undertaken the above work on Page 6 of 22 C/SCA/66/2018 JUDGMENT behalf of the CPWD, I notice that the assessee have filed e-tender for the work mentioned in para 2.1 above, which has been accepted by the Executive Engineer, C.P.W.D., Ahmedabad on behalf of Government of India. In other words, no agreement between the assessee and CPWD was made on any stamp paper. It was accepted vide letter No. 54[4]/IITPD/2014/92 dated 16th June 2014.
I find that the assessee had provided the services to the Executive Engineer, IITGN, Project Division-I, CPWD, Ahmedabad [hereinafter referred as the service recipient] which is the Department of the Government of India. They have awarded a work order No. 54[4]/IITPD/2014/T2 dated 16.06.2014 under an agreement No. 01/EE/IITGNPD/2014-15 with the Executive Engineer, IITGN Project Division- 1, CPWD, Ahmedabad for construction of Housing Building [Phase 1-A] and Student Hostel at permanent campus of IIT, Gandhinagar, Near Village Palaj, Gandhinagar and Development works ie., Parking Sheds, W/S, Drainage network, pavements, irrigation system, street light cabling, etc. I also observe that as per condition of the work order, the assessee will submit running account bills alongwith performance of work done by them to the Department. After due verification by the appropriate authority, the amount is passed for payment and paid to the contractor through RTGS mode. I find that in the instant case, the assessee received an amount of Rs. 3,49,16,664/=; Rs. 2,49,99,843/=; Rs. 4,17,17,014/=; Rs.Page 7 of 22
C/SCA/66/2018 JUDGMENT 50,52,138/= and Rs. 80,52,685/= which is evident from copies of statement containing the details of bills passed and payment of 6th to 9th running account bills and memorandum of payment for 2nd RA [Elec] issued by the Executive Engineer, IITGN, Project Division-I CPWD, Gandhinagar and Executive Engineer [Electric], IIT Project Electric Division, CPWD, Ahmedabad respectively which was submitted by the assessee, ledger account of IIT Gandhinagar Project from 01.04.2014 to 18.03.2016 and relevant portion of Bank statement of the assessee issued by Baroda Rajasthan Kshetriya Gramin Bank, Viashali Nagaar, Ajmer submitted by them. The assessee has paid the service tax Rs. 59,81,343/= for the period from April 2015 to December 2015 in the months of December 2015 and January 2016 vide various GAR-7 challans which were verified from NSDL by the JRO, I find that the agreement was made between them prior to 01.03.2015 the work covers by sub-clause (a) of Clause [1] of Section 102 of the Finance Act, 1994.
However, the service tax on the amount passed and paid after various deductions by the recipient of service have been deposited by the assessee under the cover of challans. I also find that the assessee vide their letter dated 28.09.2016 withdrawn the claim of refund of service tax amounting to Rs. 6,86,951/= which was deposited by the sub-contractor, namely M/s. Mahindra Electric Stores, Ahmedabad vide GAR-7 CIN 5102470412201553817. The same is liable for rejection. Thus, the claim of Rs.
Page 8 of 22
C/SCA/66/2018 JUDGMENT 59,81,343/= is admissible on merit under Section 102 ibid ."
On limitation also, he did not find that the application for refund was barred by limitation. However, he rejected the refund claim additionally on the ground of unjust enrichment.
" UNJUST ENRICHMENT As per Section 12B of the Central Excise Act, 1944 as made applicable to the service tax matter also by virtue of Section 83 of the Finance Act, 1994, stipulates that every person who has paid the duty of excise on any goods under this Act, shall unless the contrary is proved by him, be deemed to have passed on the full incidence of such duty on the buyer of such goods. As per Section 11B [1] of the Central Excise Act, 1994 stipulates that 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, 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 12[A] 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 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.Page 9 of 22
C/SCA/66/2018 JUDGMENT I observe that in the instant case, the service tax paid by the assessee has been reimbursed vby the service recipient which is evident from the notice dated 18.05.2016 sent by CPWD, IIT, Gandhinagar Division-I to seek the refund from the Department and remit the amount of service tax to them, Ledger account of service tax [reimbursed] of the assessee from 06.01.2016 to 04.02.2016 alongwith relevant portion of bank statement issued by Baroda Rajasthan Kshetriya Gramin Bank, Vaishali Nagar under which service tax is credited [Supra].
I observe that in the instant case, the serviced tax paid by the assessee has been reimbursed by the service recipient which is evident from the notice dated 18.05.2016 sent by CPWD, IIT, Gandhinagar Division -1 to seek the refund from the department & remit the amount o0f service tax to them. Ledger account of service tax (reimbursed) of the assessee from 06.01.2016 to 04.02.2016 alongwith relevant portion of bank statement issued by Baroda Rajasthan Kshetriya Gramin Bank, Vaishali nagar, under which service tax is credited (Supra).
From the above, it is established that the assessee have collected the amount of service tax from the service receiver. I also observe that the submissions made by the assessee vide their reply to the show cause notice are not tenable as the same are made without any documentary evidence. Therefore, the service tax refund claim amounting to Rs. 59,81,343/- held liable to be sanctioned on merit is required to be credited to the Consumer Page 10 of 22 C/SCA/66/2018 JUDGMENT Welfare Fund as stipulated under Section 11B(2) of the Central Excise Act, 1944 made applicable to the service tax matters by virtue of Section 83 of the Finance Act, 1994 as the assessee have failed to rebut the presumption of unjust enrichment.
In view of foregoing discussion and findings, I hold that the refund claim of Rs. 59,81,343/- (Rupees Fifty Nine Lac Eighty One Thousand Three Hundred Forty Three only) is liable to be credited in the Consumer Welfare Fund in terms of the provisions of Section 11B(2) of the Central Excise Act, 1944 as made applicable to the service tax matters by virtue of Section 83 of the Finance act 1994. Accordingly, I pass the following order:
ORDER
(i) I, hereby, sanction refund of Rs.
59,81,343/- (Rupees Fifty Nine Lac Eighty One Thousand Three Hundred Forty Three only) under Section 102(2) of the Finance Act, 1994.
(ii) The sanctioned refund of Rs.
59,81,343/- (Rupees Fifty Nine Lac Eighty One Thousand Three Hundred Forty Three only) is being credited in the Consumer Welfare Fund in terms of provisions of Section 11B(2) of the Central Excise Act, 1944 as made applicable to the service tax matters by virtue of Section 83 of the Finance Act, 1994.
Page 11 of 22
C/SCA/66/2018 JUDGMENT
(iii) I hereby reject the refund claim of Rs.
6,86,915/- as withdrawn by the assessee as discussed above."
In the meantime, CPWD was of the opinion that the petitioner must refund the said amount of service tax since the Legislature has exempted the same. However, since the petitioner was unable to claim refund from the Service-tax Department and return the amount to CPWD, the CPWD started coercive recoveries. The petitioner's final bill and the security deposit in relation to the execution of the work for IIT, Gandhinagar were utilized for such purpose. This still left a short-fall of a sum of Rs. 21,07,998/= which the CPWD proposes to recover from the petitioner's other on-going works with the Department. This is abundantly clear from the affidavit-in-reply dated 17th April 2018 filed by the respondent no. 1 in which the following averments are made :-
"[15] The action of the answering respondent which was initiated as per Clause 29/29A of GCC of the said Contract as the petitioner failed to refund the service tax reimbursed to him. The actions include following:
(a) The withheld amount of Rs. 3,79,576/- in the final bill was released and this amount was adjusted as recovery (part) as the service tax amounting to Rs.
66,68,294/- has not been refunded by the petitioner. Page 12 of 22
C/SCA/66/2018 JUDGMENT
(b) The 3 nos FDRs submitted by the petitioner
towards Security Deposit bearing Nos. 0262725, 0262726 and 0262727 were encashed amounting to Rs. 41,80,720/- and adjusted as recovery (part) as the service tax amounting to Rs. 66,68,294/- has not been refunded by the petitioner.
(c) for recovery of balance due amounting to Rs. 21,07,998/-, request has been made to other CPWD Division where the petitioner is presently working.
Since, the clause 29/29A provides for such an action and action taken by the respondents is well within the ambit of terms of contract the said action cannot be said to be illegal, arbitrarily and unjust." Having heard learned advocates for the parties and having gone through the documents produced on record, we find that the stand of CPWD is wholly unjust and unreasonable. We have noticed that in the execution of works contract for CPWD; as per the then prevailing law, the service tax was collected by the petitioner and deposited with the Government revenue. Subsequently, however, the law was amended by virtue of which, in relation to the construction carried out by the petitioner for CPWD, service tax was exempted with retrospective effect. It is undisputed position that such tax was not required to be paid. The Page 13 of 22 C/SCA/66/2018 JUDGMENT amended provision also envisaged refund of service tax already paid, if application is filed within prescribed time. The order passed by the respondent no. 4-Assistant Commissioner of Central Excise & Service Tax, Ajmer also supports this proposition in the above quoted portion of the order. However, when the petitioner applied for refund, at the instance of CPWD, the respondent no. 4 rejected such application on the ground of unjust enrichment holding that the refund of such amount would benefit the petitioner. He, instead of refunding the amount, ordered crediting the same in the Consumer Welfare Fund in terms of Section 11B of the Central Excise Act, 1944.
In view of petitioner's inability to get refund of the amount in question and to deposit it with CPWD, Gandhinagar, the said department found a different way to recover the same from the petitioner. As noted, the CPWD has withheld a sum of Rs. 3,79,576/= from the petitioner's final bill and adjusted it against recovery and further sum of Rs. 41,80,720/= of security deposit was also adjusted for the same purpose. The remaining amount of Rs. 21,07,998/= would be recovered from the petitioner's running bills for the other on-going projects.
For multiple reasons, both - CPWD as well as the Assistant Commissioner of Central Excise & Service Tax, Ajmer committed Page 14 of 22 C/SCA/66/2018 JUDGMENT serious legal errors. Firstly, as is well-known, for recovery and refund of service tax, provision of the Central Excise Act, 1944 are applied. Under Section 11B of the Central Excise Act, it is well settled that the refund claim can as well be made by the ultimate consumer who may have borne the burden of tax. The Supreme Court in the case of Oswal Chemicals & Fertilizers Limited vs. Commissioner of Central Excise, Bolpur, reported in [2015] 14 SCC 431 referring to the Constitution Bench decision in the case of Mafatlal Industries Limited v. Union of India, [1997] 5 SCC 536, in context of Section 11-B of the Central Excise Act, held and observed as under :
"The said provision is made for obvious reasons. Though the duty under Section 11-B of the Act is payable by the manufacturer, a manufacturer would generally pass on the burden of the excise duty to the buyer or it may be some other person. It is for this reason, a person who is ultimately aggrieved with the payment of the said duty and challenges the order successfully can seek the refund. This becomes apparent from the reading of clause [e] to Explanation [B] appended to the aforesaid provision which is as under :
"Explanation - For the purpose of this section -
(B) 'relevant date' means -
(e) in the case of a person, other than the manufacturer, the date of purchase of the goods by such person".Page 15 of 22
C/SCA/66/2018 JUDGMENT Explanation [B] defines "relevant date". Though this date has reference to the calculation of limitation period for the purposes of seeking refund of the duty under the aforesaid provision. However, clause (e) while stating the "relevant date" clarifies that in case of a person, other than the manufacturer, the date of purchase of goods by other person would be the relevant date. This itself indicates that the person can be other than the manufacturer and Explanation [B] caters to such other person.
8. It is not even necessary to embark on detailed discussion on this aspect inasmuch as we note that the Constitution Bench of this Court in Mafatlal Industries Limited vs. Union of India has already settled this aspect in the following words :
"108. (xii) Section 11-B does provide for the purchaser making the claim for refund provided he is able to establish that he has not passed on the burden to another person. It, therefore, cannot be said that Section 11-B is a device to retain the illegally collected taxes by the State. This is equally true to Section 27 of the Customs Act, 1962"
9. We are, therefore, of the opinion that the appellant who had paid the excise duty to the manufacturer viz. M/s. Indian Oil Corporation Limited and BPCL in the instant case, had the necessary locus standi to file the application claiming the refund of the duty."
The Supreme Court thus recognized the locus standi of a person other than a manufacturer to file a refund claim under Section 11-B of the Central Excise Act, 1944. Page 16 of 22
C/SCA/66/2018 JUDGMENT In the case of Commissioner of Central Excise, Madras vs. Addison & Company Limited, reported in [2016] 10 SCC 56, similar observations have been made by the Supreme Court, which read thus-
"24. That a consumer can make an application for refund is clear from para 98 and 99 of the judgment of this Court in Mafatlal Industries. We are bound by the said findings of a larger Bench of this Court. The word "Buyer" in clause (e) of the proviso to Section 11-B(2) of the Act cannot be restricted to the first buyer from the manufacturer. Another submission which remains to be considered is the requirement of verification to be done for the purpose of finding out who ultimately bore the burden of excise duty. It might be difficult to identify who had actually borne the burden but such verification would definitely assist the Revenue in finding out whether the manufacturer or buyer who makes an application for refund are being unjustly enriched. If it is not possible to identify the person/persons who have borne the duty, the amount of excise duty collected in excess will remain in the fund which will be utilized for the benefit of the consumers as provided in Section 12-D."
In the present case, it was therefore upto the CPWD to apply for refund of the service tax which was paid as per the law prevailing at the relevant time, but which became refundable on account of retrospective amendment in the law. The CPWD instead Page 17 of 22 C/SCA/66/2018 JUDGMENT of applying for refund, itself insisted that the petitioner must apply and when the petitioner's application for refund was rejected by the Assistant Commissioner of Service Tax, Ajmer, CPWD found a novel way to recover the same from the petitioner by utilizing the petitioner's security deposit, unpaid amounts of final bill and the petitioner's running bills of other contracts. These are wholly impermissible means of recovery.
The petitioner as a service provider was basically not even required to bear the service tax burden, as duty was to be collected from the service recipient and to be deposited with the Government revenue, if the service tax was payable. If the amount was refunded by the Service-tax Department, it was the duty of the petitioner to ensure that the same reaches the service recipient. If, however for whatever reason, the refund is not granted, surely the petitioner cannot be asked to bear the burden thereof. Strangely, the service tax department holds that if the refund is granted, the petitioner would retain it and therefore benefit unjustly, and therefore, does not granted refund, citing it a case of unjust enrichment. The CPWD holds a belief that whatever be the reason for the petitioner not being able to retrieve such amount from the service tax department, the CPWD must get it back; even if it is from the petitioner personally. In the process, if we allow this situation to Page 18 of 22 C/SCA/66/2018 JUDGMENT prevail, the petitioner would end up losing the service tax component from his profit which in the first place was not the liability of the petitioner. Instead of a case of unjust enrichment, it would be a case of unjust impoverishment.
The respondent no. 4 was also not correct in his approach while dealing with the petitioner's refund application. In the communication dated 7th November 2016, the petitioner had made it abundantly clear that the service tax refund is being claimed for and on behalf of the CPWD and the petitioner would have no objection, if the amount is directly paid to the said organization. Ignoring such representation of the petitioner, the Assistant Commissioner of Service Tax, Ajmer held that this was a case of unjust enrichment. If he was of the opinion that the petitioner was not the correct person who can ask for refund, he could have stated so in the order. This would have enabled the petitioner to point out to the CPWD the correct reason for not being able to claim refund of the service tax. Instead, the Assistant Commissioner wrongly applied the principle of unjust enrichment and ordered that the service tax shall be deposited with the Consumer Welfare Fund.
The petitioner is squeezed between two government departments. The Service Tax authority does not return the service Page 19 of 22 C/SCA/66/2018 JUDGMENT tax to the petitioner apprehending that the petitioner will not return it to CPWD and will therefore be enriched unjustly. The CPWD recovered such amount from the petitioner since the petitioner could not retrieve it from the service tax department. In the process, the petitioner ended up bearing the burden of service tax which was not its liability.
Counsel for the respondent no. 4-Assistant Commissioner of Central Excise & Service Tax, Ajmer had raised a preliminary contention that this Court has no territorial jurisdiction since the service tax was deposited at Ajmer where the petitioner is assessed and the refund application was filed and rejected before the Ajmer authority. Strangely, counsel for CPWD also joined in the chorus. In so far as the action of CPWD authority is concerned, we have no doubt that the cause has arisen within the jurisdiction of this Court. The contract for construction of the building was executed at Gandhinagar. The building was constructed by the petitioner in the outskirts of Gandhinagar town. Payments were made and received within the State of Gujarat. The correspondence and actions taken by CPWD all arose within the jurisdiction of this High Court. We have no iota of doubt that this Court has territorial jurisdiction to examine the legality of the action of CPWD. The orders passed by the Assistant Commissioner of Central Excise & Service Tax, Ajmer Page 20 of 22 C/SCA/66/2018 JUDGMENT of course have a territorial origination outside the State, however, these two actions and orders are inter-linked and cannot be separated one from the other for testing the legality. When the substantial, or in fact, the larger part of the cause of action can be said to have arisen within the State, we see no hesitation in exercising the jurisdiction even against the order passed by the Assistant Commissioner of Central Excise & Service Tax, Ajmer.
In the result, petition is disposed of with the following directions :
[1] The order passed by the respondent no. 4- Assistant Commissioner of Central Excise & Service Tax, Central Excise & Service Tax Division, Ajmer to the extent it holds that it is a case of unjust enrichment, and therefore, directs depositing of the said sum of Rs.
59,81,343/= to be credited in the Consumer Welfare Fund is declared to be illegal. The order is quashed, however, without disturbing the findings and observations on the allowability of the refund claim.
The proceedings are placed back before the Assistant Commissioner of Central Excise & Service Tax, Central Excise& Service Tax Division, Ajmer [Rajasthan]. It would be open for the CPWD to join in the said Page 21 of 22 C/SCA/66/2018 JUDGMENT application as a co-applicant. If so done by 30th June 2018, the competent authority shall decide such application on merits. We also hold that not the petitioner, but the CPWD can pursue the refund claim.
[2] CPWD shall release the amounts already adjusted from the petitioner's running bills of the present contract and the security deposit with simple interest @ 7.5% per annum commencing from, after three months of the completion of the execution of the contract till actual payment. It is further directed that the CPWD shall not seek any recovery from the petitioner in respect of service tax component from the petitioner's bills of other contracts.
[Akil Kureshi, J.] [B.N Karia, J.] Prakash Page 22 of 22