TMI Blog2017 (5) TMI 455X X X X Extracts X X X X X X X X Extracts X X X X ..... ucation Cess and Secondary and Higher Secondary Education Cess computed thereon, also does not bear the character of a duty of excise, but is merely an amount paid under a mistake of law. As a necessary corollary, it follows that the provisions of the Central Excise Act, 1944 would not be applicable for refund of such amount paid by mistake. - the reliefs granted by the Hon’ble High Court in the case of Joshi Technologies International on an identical situation would be binding on this Tribunal, when such an order of the Hon’ble Court is of consequential nature. Appeal allowed - decided in favor of appellant. - Ex. Appeal Nos. 75387, 75388/16 - Order No. F/O/75806-75807/2017 - Dated:- 27-4-2017 - Shri P. K. Choudhary, Hon ble Judicial Member Shri S.C. Jana, Consultant for the Appellant Shri K. Choudhury, Supdt. (A.R.) for the Revenue ORDER Per Shri P. K. Choudhary The issue involved in these appeals is as to whether the refund claims filed by the appellants of the Higher Education Cess and the Secondary Higher Secondary Cess paid on tea cess for the period 2004 to 2014 are time barred and hit by the principle of unjust enrichment in terms of Section 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Board s Circular dated 07.01.2014. The relevant portion of the said Circular is reproduced below:- Attention is invited to Circular No. 345/2/2004-TRU (Pt.), dated 10th August, 2004 [2004 (171) E.L.T. (T3)], in which it was clarified that the Education Cess chargeable under Section 93(1) of the Finance (No. 2) Act, 2004 is to be calculated by taking into account only such duties which are both levied and collected by the Department of Revenue. 2. Representations have been received from trade and field formations seeking clarification as to whether the Education Cess chargeable under Section 93(1) of the Finance (No. 2) Act, 2004 and the Secondary and Higher Education Cess chargeable under Section 138(1) of the Finance Act, 2007 should be calculated taking into account the cesses which are collected by the Department of Revenue but levied under an Act which is administered by different departments such as Sugar Cess levied under Sugar Cess Act, 1982, Tea Cess levied under Tea Act, 1953 etc. 3. The matter has been examined. A cess levied under an Act which is not administered by Ministry of Finance (Department of Revenue) but only collected by Department of Reve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able to pay Education Cess and Secondary and Higher Secondary Education Cess. Education Cess has been levied under Section 93 of the Finance Act, 2004 and Secondary and Higher Secondary Education Cess has been levied under Section 138 of the Finance Act, 2007. It would, therefore, be germane to refer to the said provisions, which read as under : 93. Education Cess on excisable goods. The Education Cess levied under Section 91, in the case of goods specified - (1) in the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), being goods manufactured or produced, shall be a duty of excise (in this section referred to as the Education Cess on excisable goods), at the rate of two per cent., calculated on the aggregate of all duties of excise (including special duty of excise or any other duty of excise but [excluding Education Cess, and Secondary and Higher Education Cess levied under Section 136 of the Finance Act, 2007] on excisable goods) which are levied and collected by the Central Government in the Ministry of Finance (Department of Revenue), under the provisions of the Central Excise Act, 1944 (1 of 1944) or under any other law for the time being in force. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e thereunder, as the case may be. 10.1 On a plain reading of Section 93, it is clear that the Education Cess levied under the Finance Act, 2004 is a duty of excise levied at the rate of two per cent., calculated on the aggregate of all duties of excise (including special duty of excise or any other duty of excise but excluding Education Cess, and Secondary and Higher Secondary Education Cess levied under Section 136 of the Finance Act, 2007 on excisable goods) which are levied and collected by the Central Government in the Ministry of Finance (Department of Revenue), under the provisions of the Central Excise Act, 1944 or under any other law for the time being in force. Thus, Education Cess is levied on the aggregate of all duties of excise (except to the extent indicated hereinabove) which are levied and collected by the Central Government in the Ministry of Finance (Department of Revenue) under the provisions of the CE Act or any other law for the time being in force. The provisions of Section 138 of the Finance Act, 2007 are identically worded except that the rate of Secondary and Higher Secondary Education Cess is one per cent. Thus, Education Cess and Secondary and Highe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess is not a duty of excise, the amount paid by the petitioner by way of Education Cess and Secondary and Higher Secondary Education Cess, cannot in any manner be said to be a duty of excise inasmuch as what was paid by the petitioner was not a duty of excise calculated on the aggregate of all the duties of excise as envisaged in the said provisions. Thus, the amount paid by the petitioner would not take the character of Education Cess and Secondary and Higher Secondary Education Cess but is simply an amount paid under a mistake of law. The provisions of Section 11B of the Central Excise Act, 1944 would, therefore, not be applicable to an application seeking refund thereof. As held by the Supreme Court in U.P. Pollution Control Board v. Kanoria Industrial Ltd., (supra), a refund is claimed on the ground that the provisions of the Act under which it was levied is or has been held to be unconstitutional, such a claim, being a claim outside the purview of the enactment, can be made either by way of suit or by way of writ petition. In the present case, though the provision under which the amount was paid was not declared unconstitutional, it has been declared that the same applies only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... until the plaintiff or applicant has discovered the mistake, or could, with reasonable diligence, have discovered it. Therefore, in case where money is paid under a mistake, the limitation would begin to run only when the applicant comes to know of such mistake or with reasonable diligence could have discovered such mistake. Adverting to the case at hand, the mistake is in the nature of a mistake of law. It appears that the legal position was not clear and hence, pursuant to representations made by the trade and field formations, the C.B.E. C. was required to issue the circular dated 7-1-2014 clarifying the issue. As noticed earlier, the petitioner had all along, right from July, 2004 been paying Education Cess and subsequently, from the year 2007 was paying Secondary and Higher Secondary Education Cess, till April, 2014. It was only when the Circular dated 7-1-2014 came to be issued by the C.B.E. C., clarifying the issue, that the petitioner came to know about its mistake. Considering the nature of the mistake and the fact that the issue was not free from doubt till the above circular came to be issued by the C.B.E. C., it also cannot be said that the petitioner could with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. JTI/2014-15/Excise/416, dated 20-11-2014 (received in the office on 21-11-2014) has also submitted a certificate dated 20-11-2014 signed by N.M. Bhalerao, Senior Finance Manager of M/s. Indian Oil Corporation Ltd. (IOCL) to an effect that M/s. Indian Oil Corporation Limited (the buyer of crude oil from Dholka and Wavel Fields) do hereby confirm that they have not paid the amount of Primary Education Cess and Secondary Higher Education Cess on OID Cess to JTI on purchase of crude oil from them . Further, it is mentioned in the said certificate that this certificate has been issued on the request of JTI for onward submission to the concerned Central Excise Authorities, in support of refund claim of Primary Education Cess and Secondary Higher Education Cess on OID Cess. This certificate should not be used other than the intended purpose, without obtaining written permission from them . This certificate has been issued by the customer (M/s. IOCL), on the request of the claimant and it has been mentioned that it should not be used anywhere else, without their prior written permission. Hence, this certificate is merely statement without being backed by any supporting document ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss and Secondary and Higher Secondary Education Cess has not been passed on to the buyer and hence, the question of any unjust enrichment on the part of the petitioner does not arise. * * * * * * * * * * * * * * 18.4 In the light of the above discussion, this court is of the view that the contention that the petition is not maintainable in view of there being an alternative statutory remedy of appeal available to the petitioner, does not merit acceptance. * * * * * * * * * * * * * * 20. For the foregoing reasons, the petition partly succeeds and is, accordingly, allowed to the following extent : The order-in-original dated 24th November, 2014 is hereby quashed and set aside. The second respondent is directed to forthwith sanction and grant the petitioner refund of ₹ 73,60,061/- as claimed vide application dated 17-7-2014. Rule is made absolute, accordingly, to the aforesaid extent, with no order as to costs. 7. On close reading of the decision of the Hon ble Gujarat High Court in Joshi Technologies International v. UOI (supra), I find that the facts of the present case are similar to the said case. I find that similar provisions as referred in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upon by the appellants, has refused to apply the Mafatlal judgement on this ground. 9. I am unable to accept the contention of the ld.A.R. for the Revenue for the reason that the Tribunal has no authority to discard the decision of the Hon ble High Court on the identical issue as contrary to the Hon ble Supreme Court. In the judicial discipline, the Hon ble Supreme Court has authority to pass remarks on the decision of the High Court. I find that the ld.A.R. had not disputed that the facts of the present case are similar to the case of Joshi Technologies International v. UOI (supra). In any event, the Hon ble Karnataka High Court in the case of CCE(Appeals), Bangalore v. KVR Construction [2012 (26) STR 195 (Kar.)] on an identical situation, dismissed the Revenue s appeal. It has been held that Service Tax paid mistakenly on construction services refund could not be rejected on the ground of limitation under section 11B of the Act, 1944. The Hon ble High Court while passing the order had considered the decision of the Hon ble Supreme Court in the case of Mafatlal Industries Ltd. (supra). The relevant portion of the said decision are reproduced below:- 15. We are not concer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 conclude that any and every claim for refund of illegal/unauthorized levy of tax can be made only in accordance with the provisions of the Act (Rule 11, Section 11B etc. as the case may be), and an action by way of suit or writ petition under Article 226 will not be maintainable under any circumstances. An action by way of suit or a petition under Article 226 of the constitution is maintainable to assail the levy or order which is illegal, void or unauthorized or without jurisdiction and/or claim refund, in cases covered by propositions No. (1), (3), (4) and (5) in Dulalbhai s case, as explained hereinabove, as one passed outside the Act and ultra vires. Suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax at all as clarified by C.B.E. C. As the payment made by the appellant is not of service tax, therefore, as held by this Tribunal in the case of Shankar Ramchandra Auctioneers (supra) the provisions of Section 11B of the Central Excise Act are not applicable. Therefore, the refund claim filed by the appellant is not time-barred. The case law relied upon by the ld. AR in Mafatlal Inds. (supra) is not relevant to the facts of this case. 7. In these circumstances, I hold that the appellant are entitled for refund claim as filed in time and the provisions of Section 11B of the Central Excise Act, 1944 are not applicable to the facts of this case. Accordingly, impugned order is set aside. Appeal is allowed with consequential relief. The Adjudicating Authority is directed to implement the order within 30 days of the communication of the same. 11. In the case of CCE, Pune-III v. Shankar Ramchandra Auctioneers[2010 (19) STR 222 (Tri.-Mumbai), held as :- 8. Now, I come to the second issue. The learned DR submitted that refund claim is barred by limitation as it has been filed beyond the period of limitation and to support this contention, he placed reliance on Jumax Foa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of ₹ 93,13,142/- in the first case and ₹ 25,31,125/- in the second case in instalments towards Service Tax on 02.01.2008, they filed refund claim after knowing the fact that the liaisoning services were not subject to Service Tax. The refund claims were rejected by the lower authorities being time barred as per section 11B of the Central Excise Act, 1944. The Tribunal allowed the appeals filed by the assessee. It has been held as under:- 14. After considering the various case laws on the subject which are discussed in the above paragraphs, we come to the conclusion that Section 11B generally governs the claim for refund of duty and interest paid on such duty. The Section has been made applicable for service tax also. In the case of KVR Constructions (supra), the Hon ble Kerala High Court has laid down yardsticks to decide those cases where Section 11B may not be applicable in service tax cases. The Hon ble High Court has held that, if there is no authority to collect service tax by the department, it would not give them the authority to retain the amount paid which was initially not payable by them. 15. In the present case, the assessee-Appellants were ren ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Joshi Technologies International v. UOI (supra), where the Adjudication order was challenged. Further, in other cases, as mentioned above, the Hon ble High Court after considering the decision of the Hon ble Supreme Court in the case of Mafatlal Industries Ltd., allowed the Refund claims on an identical situation. The Hon ble Nagpur High Court in the case of Bhailal Jagadish v. Addl. Dy. Commr. and another [AIR 1953 (Nag.) 89], in full Bench decision observed that even assuming that the powers of the High Court under Article 226 of the Constitution are not appellate powers in the strict sense of the word and that they might be regarded as supervisory powers; it is open to the High Court to make a direction to the inferior Tribunal or substitute its order for that of the inferior Tribunal when such an order is of a consequential nature. In my considered view, the reliefs granted by the Hon ble High Court in the case of Joshi Technologies International (supra) on an identical situation would be binding on this Tribunal, when such an order of the Hon ble Court is of consequential nature. The ld.A.R. cited various case laws which are not applicable in the present facts and circumstance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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