Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise & ... vs M/S. Shankar Ramchnadra Auctioneers on 26 December, 2014
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. Appeal No. ST/462/2011-Mum. (Arising out of Order-in-Appeal No. P-III/VM/66-67/2011 dt. 22/03/2011 passed by the Commissioner of Central Excise (Appeals), Pune-III) For approval and signature: Honble Mr. P.S. Pruthi, Member (Technical) ============================================================
1. Whether Press Reporters may be allowed to see :
the Order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982?
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?
4. Whether Order is to be circulated to the Departmental :
authorities?
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Commissioner of Central Excise & Service Tax, Pune-III
:
Appellant
VS
M/s. Shankar Ramchnadra Auctioneers
:
Respondent
Appearance
Shri S.V. Nair, Assistant Commissioner (A.R.) for Appellant
Ms. Sangeeta A. Panhale, Partner for respondent
CORAM:
Mr. P.S. Pruthi, Member (Technical)
Date of hearing : 26/12/2014
Date of pronouncement : /2015
ORDER NO.
Revenue has filed appeals against the impugned Order-in-Appeal which sanctioned the refund claims of the respondent on the condition that certificates are produced from the Government authorities indicating that no service tax was paid to the respondent during the relevant period under dispute.
2. The respondents, auctioneers, provided auctioneering service to Maharashtra State Transport (MRSTC) and Pune Municipal Corporation (PMC) for the period July 2007 to September 2007. Service tax amounting to Rs. 1,71,387 was paid on 5.10.2007. On a clarification dt.3.10.2008 received from the Assistant Commissioner that Service tax was not payable on service provided to the Government, the respondents filed a refund claim on 21.11.2008 which was received after the expiry of one year from the date of payment of service tax. Initially, the refund claim was sanctioned by the Assistant Commissioner who held that in view of the Supreme Court decision in the case of Mafatlal Industries Vs. UOI-1997 (89) ELT 247, since the refund claim is based on discovery of mistake, the period of limitation would commence from the date of receipt of the clarification letter dt. 3.10.2008 from the AC. The department preferred an appeal to the Assistant Commissioner on grounds of time limitation as well as unjust enrichment . The Commissioner (Appeals) held that as no service tax was payable by the respondent, what was paid was not service tax and therefore the question of limitation under Rule 11B will not arise and would come under the general law of limitation. He relied on the Honble Madras High Court decision in the case of Nataraj and Venkat Associates Vs. Assistant Commissioner 2010 (249) ELT 337 (Mad) . On the issue of unjust enrichment he held that refund may be allowed if the Government Authorities to whom the auctioneering service was provided certify that no tax was collected by them. The Revenue has filed appeal before us against the orders of Commissioner (Appeals) on the issue of time limitation only. In the grounds of appeal it is stated that the Honble Supreme Court in the case of Mafatlal Industries (supra) held that writ jurisdiction of the High Court cannot be barred by Section 11 B but the Commissioner (Appeals) being an officer is bound by the ambit of statute as contained in Section 11B of the Central Excise Act, 1944 as made applicable to Service Tax under the provisions of the Finance Act, 1994.
3. Heard both sides and considered the submissions.
4. Ms. Sangeeta Panhale partner of the respondent placed on record the following judgments which held that when the assesse is not required to pay service tax but have paid the service tax erroneously and the same is not disputed by the department, the provisions of Section 11B of the Central Excise Act regarding period of limitation are not applicable.
(i) Jyostna D. Patil Vs. Commissioner of Central Excise, Nagpur 2014 (10) TMI 642 CESTAT Mumbai.
(ii) Shravan Banarsilal Vs.Commissioner of Central Excise 2014 (12) TMI 828 CESTAT Mumbai.
(iii) KVR Construction 2012 (7) TMI 22 Karnataka High Court Further she states that it was only in the Budget of 2010, under Notification dt. 27.2.2010, an explanation to the definition of taxable service Auctioneer Service was added to clarify that the phrase Auction by Government means an auction involving sale of Government Property by an auctioneer and not when the Government Acts as an auctioneer for sale of private property. Therefore, they sought clarification from the Assistant Commissioner on 23.9.2008. The Assistant Commissioner clarified vide his letter dt. 3.10.2008 that the service provided to the Government is not taxable. This letter was received on 6.10.2008. Had the clarification been given in September itself they would have been able to file the refund claim in time. She also relied on the Supreme Court judgement in the case of Mafatlal Industries Pvt. Ltd. in which it was held that if a tax is levied by mistake, it is open to the assesse to pray for refund .
5. The Ld. AR appearing for the Revenue submitted that the Corporations for whom the auctioneering service was provided are not covered under the definition of Government and therefore service tax is payable. He relied on the judgment of Honble High Court in the case of Andrew Telecom (I) Pvt. Ltd., Vs. Commissioner of Customs and Central Excise, Goa 2014 TIOL-497-HC to support his view that the Rule of limitation under Section 11B will apply.
6. I have carefully gone through the facts of the case and the submissions made by both sides.
7. At the outset, I find that Revenue has challenged the order of Commissioner (Appeals) only on the issue of limitation. This is clear from Paras 10 to 14 of the grounds of appeal in the appeal memorandum. Therefore, I do not propose to discuss the issue on merits or unjust enrichment.
8. The claim of Rs. 1,71,387/- was filed on 21.11.2008 whereas the service tax was paid on 5.10.2007. This claim is filed beyond the statutory time limit of 1 year as prescribed in Section 11B of the Central Act, as made applicable to Service Tax Law i.e. Finance Act, 1994. I have gone through the judgments cited by both sides. The respondent has not appreciated the judgement of Supreme Court in the case of Mafatlal Industries in its proper perspective. The Supreme Court held that In the face of the express provision which expressly declares that no claim for refund of any duty shall be entertained except in accordance with the said provision, it is not permissible to resort to Section 72 of the Contract Act to do precisely that which is expressly prohibited by the said provisions. In other words, it is not permissible to claim refund by invoking Section 72 as a separate and independent remedy when such a course is expressly barred by the provisions in the Act, viz., Rule 11 and Section 11B. For this reason, a suit for refund would also not lie. Taking any other view would amount to nullifying the provisions in Rule 11/Section 11B, which, it needs no emphasis, cannot be done. It, therefore, follows that any and every claim for refund of excise duty can be made only under and in accordance with Rule 11 or Section 11B, as the case may be, in the forums provided by the Act. No suit can be filed for refund of duty invoking Section 72 of the Contract Act. So far as the jurisdiction of the High Court under Article 226 - or for that matter, the jurisdiction of this court under Article 32 - is concerned, it is obvious that the provisions of the Act cannot bar and curtail these remedies. It is, however, equally obvious that while exercising the power under Article 226/Article 32, the Court would certainly take note of the legislative intent manifested in the provisions of the Act and would exercise their jurisdiction consistent with the provisions of the enactment..
9. In my view, to appreciate the Mafatlal judgement and place reliance on it, the discerning factor to be seen is whether the amount of service tax paid was actually paid as duty in the first instance. In the present case I find that the amount was admittedly paid ( although mistakenly) as service tax. The case law cited by the Ld. AR of Andrew Telecom (Supra) is very relevant to the present facts. In the case of Andrew Telecom the assesse had paid service tax under a bona fide belief that the agency commission paid by foreign Principal in convertible foreign exchange is leviable to service tax under business auxiliary service. The Board clarified later that the activity is covered under export of services Rules and service tax is not payable. The Honble High Court therefore held that the Rule of limitation will apply. The Honble High Court in deciding the matter considered the Apex Court judgment in the case of Mafatlal Industries Ltd. (supra) as well as the judgment in the case of Natraj and Venkat Associates (supra). After considering various judgements the Mumbai High Court held that 18.. Equally, the judgement noted by the Division Bench of Karnataka High Court in paragraph 21 must be seen in the context. If the amount paid cannot be taken to be duty of excise, then, the bar of limitation cannot be applied. Even otherwise and with greatest respect, the observations and findings rendered earlier cannot be reconciled with the last few lines of this judgment. Even a writ petition under Article 226 of the Constitution of India cannot be decided by overriding a law or legal regime. There is no warrant or justification for holding that a stale or belated claim can be granted in a Constitutional remedy by ignoring a statutory prescription.
19. Before us, the undisputed position is that the amount was paid by the Appellant as service tax. That tax was not imposable or leviable on export of services was a clarification made by the Department and relying on that clarification, the refund of duty or service tax was claimed. This was squarely a case falling within the provisions of the Central Excise Act, 1944 and therefore, the rule of limitation under Section 11B was applied when the application for refund was made invoking Section 11B of the Central Excise Act, 1944. We have no manner of doubt that when this was the provision invoked, same applied with full force including the rule of limitation prescribed therein. For these reasons, we are of the opinion that the decisions relied upon cannot be of any assistance.
10. In view of the above I hold that the refund of Rs.1,71,387/- is not admissible.
11. Appeal is dismissed.
(Pronounced in court on 2015)
(P. S. Pruthi)
Member (Technical)
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