TMI Blog2014 (4) TMI 507X X X X Extracts X X X X X X X X Extracts X X X X ..... prescribed therein could not have been applied. This judgment is, therefore, clearly distinguishable on facts. 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. - That 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 applies with full force including the rule of limitation prescribed therein. - No substantial question of law arises - Decided against assessee. - CEA NO.72 OF 2013 - - - Dated:- 3-4-2014 - S C Dharmadhikari and Girish S Kulkarni , JJ. For the Appellant : Mr R V Desai, Sr. Adv. a/w Mr Anil Khanna , Mr M S Bharadwaj , Mr Rohit Pardeshi and Mr N P Khutal For the Respondent: Mr Pradeep S Jetly JUDGEMENT 1. This Appeal under Section 35G of the Cen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10 (17) STR 3 (Mad.)? 5. Mr.Desai submits that these are substantial questions of law. He submits that the Tribunal's order has far reaching consequences and in the event the Tribunal's view is upheld, then, if a duty is recovered or paid contrary to the provisions of the Central Excise Act, 1944 or that a service tax was not liable to be recovered or paid in accordance with the provisions of the Central Excise Act, 1944, would ordinarily mean the recovery is illegal, but the Tribunal makes an artificial distinction between constitutionality of the levy and illegality thereof. In any illegal recovery, the Revenue is not entitled to retain the benefit or sums. The application for refund could not have been rejected by applying the bar contained in Section 11B( 1) of the Central Excise Act, 1944. Mr.Desai would submit that the Tribunal's view proceeds on misreading and misinterpretation of the law laid down by the Nine Judge (Larger Bench) decision of the Honourable Supreme Court in the case of Mafatlal Industries Limited v/s Union of India reported in 1997 (89) E.L.T. 247 (SC). Mr. Desai submits that the Honourable Supreme Court and in the majority view, does not make ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e considered and granted. Beyond that, the Tribunal's view cannot be upheld. 7. On the other hand, Mr.Jetly , learned counsel appearing for the Respondent/ Revenue, submits that the Appeal does not raise any substantial question of law. The application for refund has been made under the Central Excise Act, 1944. That is to claim refund of the service tax which has been paid by the Appellant/ Assessee. In considering that application, the Assistant Commissioner and the Tribunal could not have ignored much less overridden the provisions of the Central Excise Act, 1944. Such application has to be considered in the light of the provisions enabling grant of refund or else there is nothing in the Act which would enable the Assessee to claim refund. If refund is claimed in accordance with the Central Excise Act, 1944, then, all provisions by which such refund applications can be considered and granted are automatically applicable. If such applications or requests cannot be granted unless they are made within the specified period, then, the view taken by the Assistant Commissioner is in accordance with law. The Commissioner (Appeals) has overlooked and brushed aside the statutory pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mended by the said Act and the same shall be dealt with in accordance with the provisions of subsection (2) as substituted by that Act: Provided further that the limitation of one year shall not apply where any duty and interest, if any, paid on such duty has been paid under protest. (2) If, on receipt of any such application, the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise is satisfied that the whole or any part of the duty of excise and interest, if any, paid on such duty paid by the applicant is refundable, he may make an order accordingly and the amount so determined shall be credited to the Fund: Provided that the amount of duty of excise and interest, if any, paid on such duty as determined by the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise under the foregoing provisions of this subsection shall, instead of being credited to the Fund, be paid to the applicant, if such amount is relatable to (a) rebate of duty of excise on excisable goods exported out of India or on excisable materials used in the manufacture of goods which are exported out of India; (b) uns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er clause (f) of the first proviso to subsection (2), including any such notification approved or modified under subsection (4), may be rescinded by the Central Government at any time by notification in the Official Gazette. Explanation. - For the purposes of this section, (A) refund includes rebate of duty of excise on excisable goods exported out of India or on excisable materials used in the manufacture of goods which are exported out of India; (B) relevant date means, (a) in the case of goods exported out of India where a refund of excise duty paid is available in respect of the goods themselves or, as the case may be, the excisable materials used in the manufacture of uch goods, (i) if the goods are exported by sea or air, the date on which the ship or the aircraft in which such goods are loaded, leaves India, or (ii) if the goods are exported by land, the date on which such goods pass the frontier, or (iii) if the goods are exported by post, the date of despatch of goods by the Post Office concerned to a place outside India; (b) in the case of goods returned for being remade, refine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore expiry of one year from the relevant date. In the facts and circumstances before us, the case is covered by Explanation (B )( f) meaning thereby, the application for refund should have been made in the present case within one year from the date of payment of duty. 11. Now the circumstances in which such claim was made need to be noted. The Appellants before us made the application (Annexure F to the Appeal memo) dated 28.04.2010 submitting that they have an Agency Commission Agreement with M/s Andrew AG, Switzerland. In terms of the said agreement, the Appellants were required to find Indian customers for overseas principal products in India and in return, they were paid the amounts or sums in convertible foreign exchange which they realized through normal banking channel. This agency commission service activity falling under the Business Auxiliary Services, in their case, amounts to export of services in terms of the Export of Services Rules, 2005. The Appellants paid the service tax on the value of foreign agency commission which they realized. In the light of the same and in view of the circular of February, 1999 issued by the Central Board of Excise and Customs, the App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Court in the case of Union of India Vs. ITC Limited reported in 1993 (67) ELT 2 SC in which the Hon'ble Apex Court upheld the view that the duty of excise is that which is levied in accordance with law and that any money which is realized in excess of what is permissible in law would be a realization made outside the provision of the Act. Hon'ble Madras High Court in the case of Nataraj and Vankat Associates Vs . Asstt . Commissioner of Service Tax, Chennai reported in 2010 (17) STR 3 (Mad) quoted by the appellant herein. In the said case the Hon'ble High Court was pleased to hold that the central excise duty which should not have been paid but paid can be recovered by filing a refund claim even beyond the time period specified under Section 11B of the Central Excise Act, 1944. In view of the above, the impugned order is not correct in law and is, therefore, set aside. Lower Authority directed to grant refund. Appeal allowed. 13. The Revenue, therefore, approached the Tribunal and the Tribunal in upholding the order of the Assistant Commissioner came to a conclusion that the Challans which have been filed along with the refund application show that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that all that the judgment of the Nine Judge Bench holds is that unconstitutional and illegal levies cannot be upheld. In his submission, the predominant consideration while giving relief to the Petitioners and Applicants who seek refund of the amounts paid pursuant to such levies is that they should not be unjustly enriched. We are of the opinion that the Honourable Supreme Court may be considering the issue of validity of the provisions like Section 11B( 1) introduced in the Central Excise Act, 1944, but the judgment cannot be applied to such an extent as would enable us to totally override and brush aside a provision like Section 11B with the rule of limitation carved out therein. The distinction as pointed out by Mr.Desai from the judgment in the case of Mafatlal Industries (supra) between unconstitutional and illegal levy or in his submission both being treated as par, will not enable us to hold that in the facts and circumstances of the present case the Assistant Commissioner and the Tribunal committed any grave error of law or perversity in rejecting the refund claim. The wider question or controversy need not be gone into in the facts of the present case. Suffice it to hold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, 1994 for the services rendered for the Trust by constructing some buildings in May, 2005 to February, 2006 and May, 2006 to February, 2007. Two refund applications filed in the month of March, 2008 and to be precise on 19.03.2008 and which were received by the Department on 28.03.2008 were rejected not on the ground that has been pressed into service by the Revenue before us, but on the ground that the amount paid by the Assessee was not a service tax, but it was in the nature of deposit with the Revenue. The amounts collected erroneously need not be refunded to the concerned persons. The Applications for refund were rejected on the ground that they were filed beyond the period of limitation prescribed under Section 11B of the Central Excise Act, 1944. This rejection of claims inter alia on the ground of limitation was questioned by filing an Appeal before the Commissioner (Appeals) and he upheld the original order. The Writ Petition was directed against both the orders and the learned Single Judge set aside the order of the Commissioner (Appeals) and directed refund of service tax paid. The learned Single Judge held that Section 11B was not applicable since the amount paid by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd claims into three groups or categories : (a) The levy is unconstitutional outside the provisions of the (I) Act or not contemplated by the Act. (b) The levy is based on misconstruction or wrong or erroneous (II) Interpretation of the relevant provisions of the Act, Rules or Notifications: or by failure to follow the vital or fundamental provisions of the Act or by acting in violation of the fundamental principles of judicial procedure. (c) Mistake of law the levy or imposition was (III) unconstitutional or illegal or not exigible in law (without jurisdiction) and, so found in a proceeding initiated not by the particular assessee, but in a proceeding initiated by some other assessee either by the High Court or the Supreme Court, and as soon as the assessee came to know of the judgment (within the period of limitation), he initiated action for refund of the tax paid by him, due to mistake of law. After referring several judgments and provisions of Section 11A 11B of Central Excise Act, at paragraph 137 of the said judgment, their Lordships have concluded as under: 137. Applying the law laid down in the decisions aforesaid, it is not possible to c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll claims for refund ought to be filed only in accordance with the Customs Act. Therefore, it did not include the payment made under some other enactment, which for some reason had erroneously been made to the Customs authorities. Even otherwise by referring to paragraph 137 of Mafatlal Industries case, one has to see whether the amount claimed is unconstitutional and outside the provisions of Section 11B of the Act. 21. In the case of Nataraj and Venkat Associates (supra), this was pertaining to service tax wherein petitioner company was dealing in architectural services and paid service tax for the construction of the building carried on at Sri Lanka and contended it would not have attracted levy of service tax. In other words, there was an application for refund of said tax and the question that arose therein was what is the relevant date for the commencement of the period of limitation for the purpose of Section 11B and was held that it would be the date of payment of duty. It was held in the said case that amounts paid cannot be taken to be duty of excise, therefore bar of limitation under Section 11B cannot be applied because such limitation would come in the way of an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the view that the Division Bench in upholding the learned Single Judge's observations relied upon the principle that when the amount is deposited with the Department and it does not constitute any demand or payment in accordance with law, then, same deserves to be refunded and while granting and awarding such claim a technical plea of limitation cannot be raised. If the matter was outside the purview of Section 11B, then, the rule of limitation prescribed therein could not have been applied. This judgment is, therefore, clearly distinguishable on facts. Equally, the judgment 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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