Madhya Pradesh High Court
M/S Mdp Infra (India) Pvt. Ltd. vs Commissioner Customs Central Excise ... on 14 January, 2019
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THE HIGH COURT OF MADHYA PRADESH
C.E.A. No. 123/2018
M/s MDP Infra (India) Pvt. Ltd. Vs. Commissioner, Customs, Central Excise & CGST
Gwalior, 14/01/2019
Shri Gautam Prasad Sharma, learned counsel
with Ms. Smrati Sharma, learned counsel for the
appellant.
Shri Praveen Surange, learned counsel for the
respondent.
This appeal under Section 35G(1) of the Central Excise Act, 1944 is directed against the final order No. A/51822/2018-SM(BR) dated 14/05/2018 passed by the Customs, Excise and Service Tax Appellate Tribunal, whereby, the Tribunal has upheld the rejection of application for refund claim of Rs.25,49,317/-, by the Assistant Commissioner, Service Tax, Division Gwalior by his order dated 15/06/2017.
The appellant holds service tax registration and paying service tax under the category of "Works Contract Services". During the period 01/03/2015 to 30/09/2015 the appellant had paid Rs. 25,49,317/- towards Service Tax and interest of Rs.57,716/- on the following work contracts:-
"(i) Construction of EWS houses for Special Area Development Authority (A Government Authority) vide work order No.02/SADA/ 2014-15, Agreement No. 04 dated 22.12.2014.2
THE HIGH COURT OF MADHYA PRADESH C.E.A. No. 123/2018 M/s MDP Infra (India) Pvt. Ltd. Vs. Commissioner, Customs, Central Excise & CGST
(ii) Construction of LIG houses (Affordable Housing) for Indore Development Authority vide Four/Accounts/ 12-13/70006, dated 19.11.2012, Agreement No. 82/2012- 13/IDA.
(iii) Construction of Model School Building at Morena for PWD, PIU Division-4 Gwalior (Department of Government of Madhya Pradesh) work order No: 02/2012-13 dated 15.06.2012, E-tender No. 14204 and office No. 1589.
(iv) Construction of Model School Building at Sabalgarh for PWD, PIU Division-4 Gwalior (Department of Government of Madhya Pradesh) work order No. 02/2012-13 dated 15.06.2012, E-tender No. 14209 and office No. 1599 dated 02.11.2012.
(v) Construction of Model School Building at Pahadgarh for PWD, PIU Division-4, Gwalior (Department of Government of Madhya Pradesh) work order No: 02/2012-13 dated 15.06.2012, E-tender No. 14209 and office No. 1601 dated 02.11.2012.
(vi) Construction of Boundary wall at National Law Institute University, a university established by State Legislature of Madhya Pradesh, Bhopal vide ref. no. by act No. 41 of 197, Letter Ref. No. 83/ NLIUB dated 23.01.2015." That prior to 01/04/2015, the appellant was availing exemption for civil works related to State and Union Government establishments used for administrative purpose. The exemption was availed under notification No. 12/2012 and 25/2012 dated 20/06/2016. As the notification dated 20/06/2012 was withdrawn w.e.f. 01/04/2015, the exemption 3 THE HIGH COURT OF MADHYA PRADESH C.E.A. No. 123/2018 M/s MDP Infra (India) Pvt. Ltd. Vs. Commissioner, Customs, Central Excise & CGST from service tax on the nature of work the appellant engaged in was not available; therefore, he paid service tax with interest for the period 01/03/2015 to 30/09/2015.
The exemption was later on restored vide notification No. 9/2016-ST dated 01/03/2016 vide Entry Sr. No. 12A(a) for the services provided under a contract which has been entered into prior to 01/03/2015 and whereon appropriate stamp duty, where applicable, has been paid prior to that date. The exemption was restored till 31/03/2020. However, as the effect of exemption vide executive order was prospective; the legislature, vide Finance Bill 2016 restored the exemption from retrospective effect by incorporating Section 102 as under:-
"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 commencing from the 1st day of April, 2015 and ending with the 29th day of February, 2016 (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, repair, maintenance, renovation or alteration of--
(a) a civil structure or any other 4 THE HIGH COURT OF MADHYA PRADESH C.E.A. No. 123/2018 M/s MDP Infra (India) Pvt. Ltd. Vs. Commissioner, Customs, Central Excise & CGST original works 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 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."
The appellant invoking Rule 173-S of the Central Excise Rules, 1944 applied for refund of Rs.25,49,317/- vide Form-R on 22/03/2017, received by the Department on 24/03/2017.
The Authority concern (Assistant Commissioner) on receiving the application issued show cause notice on 01/05/2017 calling upon the 5 THE HIGH COURT OF MADHYA PRADESH C.E.A. No. 123/2018 M/s MDP Infra (India) Pvt. Ltd. Vs. Commissioner, Customs, Central Excise & CGST appellant as to why the application for refund be not rejected for the following reasons:-
"2. And whereas there is no provision for refund of Service Tax other than by way of adjustment Under Finance Act, 1994. However certain provisions of Central Excise Act, 1944 have been made applicable in Service Tax matters through Section-83 of Finance Act, 1994 which read as under:-
2(a) "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 : 9, 9A, 9AA, 9B, 9C, 9D, 9E, 11B, 11BB, 11C, 12, 12A, 12B, 12C, 12D, 10(12E, 14, 15, 31, 32, 32A to 32P (both inclusive), 33A, 34A,35EE,35F], 11 (35FF) to 35O (both inclusive}, 35Q, 12[35R,] 36, 36A, 37A, 37B, 7C, 37D 13[38A] and 40".
Accordingly, the Word(S) 'duty of excise' or 'duty', shall mean 'Service Tax', the word 'manufacture' shall mean 'Service Provider', the word 'buyer' shall mean 'Service receiver'. (Except Under Section 12 B) and 'goods', shall mean 'Service' whenever they appear Under the Section of Central Excise Act, 1944 and circular/ Clarification, issued in this regard, which will be quoted referred or discussed in this Show Cause Notice. Further, the word 'Act' appearing in Section 12B of the Central Excise Act, 1944 shall mean 'Finance Act, 1944', and the word 'buyer' shall mean 'ultimate buyer of goods which are manufactured using taxable services'. 2(b) Sub Section (I) Section 11B of the Central Excise Act, 1944 provides that any person claiming refund of any duty of excise may make an application for 6 THE HIGH COURT OF MADHYA PRADESH C.E.A. No. 123/2018 M/s MDP Infra (India) Pvt. Ltd. Vs. Commissioner, Customs, Central Excise & CGST refund of 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 in relation to which such refund is claimed was collected from, or paid by, him and the incidence of such duty had not been passed on by him to any other person. It further provides that the limitation of one year shall not apply where any duty has been paid under protest. Sub Section (2) of Section 11B of the Central Excise Act, 1944 provides that if the Assistant Commissioner or Deputy Commissioner of Central Excise is satisfied that the whole or any part of the duty paid by the applicant is refundable, he may make an order accordingly and the amount so determined shall be credited to the 'Consumer Welfare Fund' except is excipiendis. However Sub Section (f) of the Section 11B provides that if the duty of excise borne by the buyer and if he had not passed on the incidence of such duty to any other person then the amount shall be paid to such buyer. Explanation annexed to Section 11B defined the 'relevant date' for the purpose of reckoning time period within which refund claim is to be filed. This date is the date of purchase of 'goods' in the case of claimed is other than the 'manufacture'.
3. And whereas the refund claim was received on 24.03.2017 therefore the service tax and interest deposited during the period of 01/03/2015 to 30/09/2015 through challans has been found time barred from the statutory 7 THE HIGH COURT OF MADHYA PRADESH C.E.A. No. 123/2018 M/s MDP Infra (India) Pvt. Ltd. Vs. Commissioner, Customs, Central Excise & CGST time-limit defined under section 11B of the Central Excise Act, 1944 wherein it is clearly mentioned that refund claim should be submitted within a period of one year of the relevant date.
4. In view of the grounds mentioned above, the claim for refund of Service Tax filed by the Noticee on 24.03.2017 for Rs. 25,49,317/- does not appear to be admissible to them since refund claim of time barred Under Section 11-B of the Central Excise Act, 1944.
5. Now, therefore, the Noticee M/s MDP Infra (India) Pvt. Ltd., Suresh Nagar, Thatipur, Gwalior (M.P.) are hereby called upon to Show Cause and explain in writing to the Assistant Commissioner, Service Tax Division, 45 A City Centre Gwalior within 15 days of the receipt of this notice as to why the refund claim Service Tax amounting to Rs.25,49,317/- filed by them as mentioned supra should be rejected."
The appellant filed reply on 10/06/2017 stating therein that the Government has restored the exemption granted under Notification No.25/2012 ST dated 20.06.2012 as amended by Notification No.9/2016-ST 01.03.2016 for the services provided under a contract which had been entered into prior to 01.03.2015 and on which appropriate stamp duty, where applicable had been paid prior to that date. The services provided during the period from 01.04.2015 to 29.02.2016 under such contracts are also exempted from service tax, even if service is provided after 01.04.2015. If service tax was paid, 8 THE HIGH COURT OF MADHYA PRADESH C.E.A. No. 123/2018 M/s MDP Infra (India) Pvt. Ltd. Vs. Commissioner, Customs, Central Excise & CGST refund has to be granted. The noticee has complied all the terms and conditions as stipulated in the Notification. Noticee has paid the service tax on the aforesaid tender/ work order and because of withdrawn of exemption by the government w.e.f. 01.03.2015 there was delay in payment of service tax and the noticee has paid the interest of Rs.57716/- and has applied for refund of the said amount of service tax with interest. And that the notification for restoration of exemption was issued in the month of March 2016 i.e. on 01.03.2016 and the noticee has filed the refund claim on 24.03.2017 within a period of one year from the month in which the exemption notification has been restored. It was further stated in reply that there was ambiguity in the exemption and the refund, the noticee was not aware "hence noticee most humbly and respectfully requested that kindly condone the delay in filing of the refund claim if any and sanction at the earliest in the interest of justice. Since, the noticee has not collected the service tax separately hence, it is irreparable loss to the noticee".
That by order dated 15/06/2017 the refund claim was dismissed being time barred under Section 11B of 1944 Act.
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THE HIGH COURT OF MADHYA PRADESH C.E.A. No. 123/2018 M/s MDP Infra (India) Pvt. Ltd. Vs. Commissioner, Customs, Central Excise & CGST Aggrieved, appellant preferred an appeal on the ground that the substantial benefit should not be denied as the appellant has made the payment of service tax on the contracts which were exempted during relevant period. As there was no legal authority to sustain the amount paid by the appellant, the department has no authority to withhold the same on the ground of limitation. It was stated that the provisions of Section 11B of 1944 Act would get attracted when there is a liability and excess duty/ tax is deposited and later on the refund of such excess amount is sought. It was stated that being exempted, the appellant was not liable to pay the service tax. Therefore, the amount received by the department was not towards the tax as would be governed by the provisions of Section 11B. It was urged that even if it is then the period of limitation prescribed being one year and since notification for restoration of exemption was issued on 01/03/2016 and the appellant had filed the refund claim on 24/03/2017, the same should have been allowed.
The appeal was, however, dismissed on 28/09/2017 by Commissioner (Appeals), on the 10 THE HIGH COURT OF MADHYA PRADESH C.E.A. No. 123/2018 M/s MDP Infra (India) Pvt. Ltd. Vs. Commissioner, Customs, Central Excise & CGST findings:-
"7. To put the legal position in proper prospective, I may mention that initially the mega exemption notification No. 25/2012-ST granted exemption interalia to certain activities under taken for the government. The said notification was amended vide notification No.06/2015- ST dated 01.03.2015 where by the said exemption for the Govt work was withdrawn. Later, vide notification No. 9/2016-ST dated 01.03.2016 the said exemption was restored. The notification No. 9/2016-ST is prospective in nature and it does not grant retrospective exemption to the activities undertaken prior to 01.03.2016 as wrongly contended by the appellant. The retrospective exemption was granted by the legislature by way of section 102 which was inserted vide the Finance Act 2016. The said section 102 of the Act read as under.
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 commencing from the 1st day of April, 2015 and ending with the 29th day of February, 2016 (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, repair, maintenance, renovation or alteration of--
(a) a civil structure or any other original works meant predominantly for use other than for commerce, industry or any other business or profession;
(b) a structure meant predominantly for use as--11
THE HIGH COURT OF MADHYA PRADESH C.E.A. No. 123/2018 M/s MDP Infra (India) Pvt. Ltd. Vs. Commissioner, Customs, Central Excise & CGST
(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 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.
8. It can be seen that section 102 was a self-contained provision for refund of any tax paid during the impugned period. The said section also provided the time limit of 06 months for filing the refund claim form the date of enactment of the Finance Act, 2016. The said section came into effect on 14.05.2016. The claim having been filed on 24.03.2017 is clearly beyond the time limit of six month prescribed in the section 102. Therefore, the adjudicating authority has rightly rejected the refund claim.
9. I may also to mention that the claim filed by the appellant is also beyond one year from the date of issue of notification No. 9/2006/ST dated 01.03.2006 and to some how claim the refund from the department they have arbitrarily calculated the time limitation 12 THE HIGH COURT OF MADHYA PRADESH C.E.A. No. 123/2018 M/s MDP Infra (India) Pvt. Ltd. Vs. Commissioner, Customs, Central Excise & CGST of one year from the month of issuance of the said notification. They have also deliberately avoided any mention of section 102 inserted vide Finance Act 2016 which would have exposed and undetermined their refund claim as the same was clearly time barred."
On further appeal, the Tribunal vide impugned order affirmed the order rejecting refund claim. The Tribunal taking into consideration the stipulations contained under Section 102 of the Finance Bill 2016 prescribed specific period of limitation of six months from the date of the assent of the President (which being 14.05.2016) for refund. And that the appellant applied for refund on 24/03/2017, i.e., with a delay of 131 days, dismissed the appeal observing:-
"8. Having carefully heard the submissions of both the sides, I find that there is no dispute on the facts. The retrospective exemption having been granted by the legislative, there was a clause for refund of the tax paid during the intervening period subject to the condition that such refund claim are filed within the period of six months.
Admittedly, the refund stands filed beyond the said period, thus, contravening the condition. There is no power with the Central Excise Authorities to legislate or to travel beyond the statutory limitations provided by the legislature. Similarly, neither the Tribunal has such powers to go beyond the provisions of the Act. The issue is well settled. Reference can be 13 THE HIGH COURT OF MADHYA PRADESH C.E.A. No. 123/2018 M/s MDP Infra (India) Pvt. Ltd. Vs. Commissioner, Customs, Central Excise & CGST made to Hon'ble Supreme Court decision in the case of Porcelain Electrical Mfg. Co. vs. CCE, New Delhi - 1998 (98) E.L.T. 583 (S.C.), wherein it was observed that the refund claim filed before departmental authorities are to be governed by the time limit provided under the statute and the general law of limitation invoked by various High Courts under their extra-ordinary jurisdiction is inapplicable to the cases where the refund obligations has been moved before the Revenue authorities."
The appellant has proposed the following substantial questions of law:-
"(A) Whether on facts and in the circumstances of the case and in law, an amount paid under the mistaken belief that the service is liable to service tax when the same is actually exempt, be considered as service tax paid?
(B) Whether on facts and in the circumstances of the case and in law, the Tribunal was justified in rejecting appellant's refund claim as time barred without appreciating the fact that delay in filing the refund claim was beyond the control of the appellant inasmuch as the construction service covered in the refund claim is actually exempt of service tax was itself disputed by the authorities as the same was under
investigation?
(C) Whether service tax paid mistakenly under construction service although actually exempt, is payment made without authority of law?"
As regard to substantial questions of law as proposed at 'A', we are not commended to any cogent material that the amount of Rs. 25,49,317/- 14
THE HIGH COURT OF MADHYA PRADESH C.E.A. No. 123/2018 M/s MDP Infra (India) Pvt. Ltd. Vs. Commissioner, Customs, Central Excise & CGST towards service tax and the penalty thereof Rs.57,716/- for the period 01/03/2015 to 30/09/2015 was deposited under misconception. Evidently, the works contract undertaken by the appellant during said period was not exempted. Therefore, the question that, the service tax and interest was paid under misconception does not arise, as would give rise for the proposed substantial question.
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 virtue of subsequent legislation the notification was made 15 THE HIGH COURT OF MADHYA PRADESH C.E.A. No. 123/2018 M/s MDP Infra (India) Pvt. Ltd. Vs. Commissioner, Customs, Central Excise & CGST 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.
As regard to substantial question 'C', the contention that the service tax was paid mistakenly is also not borne out from the facts.
The decisions relied upon by the appellant in Commr. Of C.Ex. (Appeals), Bangalore Vs. KVR Construction [Writ Appeal No. 2992-2993 of 2009 (Karnataka High Court)], CC&ST Vs. H.K. Dave Ltd.
[(2015) 38 STR 77], Wazir Singh Swaran Singh Consignment Stockist (P) Ltd. Vs. CCE [2010 (18) STR 468], CCE Vs. Crompton Greaves Ltd. [(2011) 22 STR 380], CCE Vs. Suresh C. Nayi [(2011) 24 STR 123], Jubilant Enterprises P. Ltd. Vs. CCE [(2014) 35 STR 430], Porcelain Electrical Mfg. Co. Vs. CCE, New Delhi [1998 (98) ELT 583 (SC)], Collector, Land Acquisition & Anr. Vs. Mst. Katiji & others [(1987) 62 CTR (SC)(Syn)23], Bharat Auto Center Vs. CIT [2006 (282) ITR 366 All.], CCE Vs. KVR Construction 16 THE HIGH COURT OF MADHYA PRADESH C.E.A. No. 123/2018 M/s MDP Infra (India) Pvt. Ltd. Vs. Commissioner, Customs, Central Excise & CGST [(2012) 26 STR 195 (Kar.)] are of no assistance in present fact situation as these judgments turn on their own facts.
As no substantial question of law arises for consideration, the appeal stands dismissed. No costs.
(Sanjay Yadav) (Vivek Agarwal)
Judge Judge
Shubhankar*
SHUBHANKAR
MISHRA
2019.01.18
10:12:55 +05'30'