TMI Blog2013 (10) TMI 1162X X X X Extracts X X X X X X X X Extracts X X X X ..... Courts on a question of law in favour of the assessee is giving rise to a wave of refund claims all over the country in respect of matters which have become final and are closed long number of years ago. We are not shown that such a thing is happening anywhere else in the world. Article 265 surely could not have been meant to provide for this. We are, therefore, of the clear and considered opinion that the theory of mistakeof law and the consequent period of limitation of three years from the date of discovery of such mistake of law cannot be invoked by an assessee taking advantage of the decision in another assessee’s case. All claims for refund ought to be, and ought to have been, filed only under and in accordance with Rule 11/Section 11B and under no other provision and in no other forum. An assessee must succeed or fail in his own proceedings and the finality of the proceedings in his own case cannot be ignored and refund ordered in his favour just because in another assessee’s case, a similar point is decided in favour of the manufacturer/assessee. In the case of Indian National Ship Owners’ Association, the Hon. Bombay High Court and Apex Court did not consider the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pondent filed a refund claim on 5.5.2010 claiming refund of service tax amount of Rs.22,79,812/- paid by them on services received by them during the period 01-04-05 to 17-04-05. The said refund claim was rejected by the adjudicating authority on the ground that it was filed much after one year from the dates of payment of tax and hence time-barred under section 11B of the Central Excise Act, 1994 which is made applicable for the purpose of refund of service tax vide section 83 of the Finance Act, 1994. Aggrieved by the order of the adjudicating authority, the respondent filed appeal with Commissioner (Appeals). The Commissioner (Appeals) held that time limit laid down in section 11B of Central Excise Act will not be applicable in the facts of the case and allowed the appeal of the respondent. The Revenue is in appeal against the said order of the Commissioner (Appeals). 5. Revenue submits that, in the instant case, tax was paid on 31-08-05, 08-09-05, 16-10-05, 31-03-06 and 26-07-07 whereas the claim was filed only on 05-05-10. Since payments made prior to 18-04-2006 were in accordance with Rule 2 (i) (d) (iv) of Service Tax Rules and payments after 18-04-2006 were in accordance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fatlal Industries Ltd. the order of Commissioner (Appeals) is bad in law and hence the same may be set aside. 7. Opposing the prayer of Revenue, Ld. Advocate for the respondent submits that the amount in question was collected without authority of law as is clear from the decision of the Hon. Apex Court in Indian National Ship Owners Association (Supra) and Revenue cannot retain any amount collected without authority of law in view of Article 265 of Constitution of India. According to him, in this case, period of limitation should start from the date of cause of action which, according to him, is the date of pronouncement of the order of the Hon. Apex Court in Indian National Ship Owners Association (supra) i.e. on 14.12.2009 and he submits that the claim was submitted within six months from 14-12-2009. He argues that refund consequent to orders passed by higher appellate forums, Tribunal and Courts were to be allowed without application of bar of limitation prior to 2007 and on 11-05-2007 provisions were introduced in section 11B in the explanation defining relevant date to prescribing time limit for affected parties to claim refund consequent to any judgment of the Tribunal o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... des as stated in the first paragraph of the order, the earlier decisions of the Courts in the matter stands overruled and a new law was laid down in this decision by a nine member Bench. So I do not consider it necessary to discuss decisions prior to this decision. When conflicting decisions are cited it is only proper that decision is taken on the basis of the Apex Court and that of the largest bench and the Apex Court and the most recent judgement of the Apex Court. Once I adopt these criteria, I am bound by the decision of the Nine Member Bench of the Hon. Apex Court in the case of Mafatlal Industries Ltd. delivered on 19-12-1996. Tax collected without authority of law was a matter of special attention of the Hon. Judges constituting the Bench. There was no unanimity of views among the nine judges. Five of the nine judges gave a decision on this issue, in para 70 of the order, as under: In short, no claim for refund is permissible except under and in accordance with Rule 11 and Section 11B. An order or decree of a court does not become ineffective or unenforceable simply because at a later point of time, a different view of law is taken. If this theory is applied u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 fore fund 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. 69. There is, however, one exception to the above proposition, i.e., where a provision of the Act where under the duty has been levied is found to be unconstitutional for violatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f tax on this score can be maintained with reference to Section 72. This too, however, does not mean that the taxes paid under an unconstitutional provision of law are automatically refundable under Section 72. Section 72 contains a rule of equity and once it is a rule of equity, it necessarily follows that equitable considerations are relevant in applying the said rule - an aspect which we shall deal with a little later. Thus, whether the right to refund of taxes paid under an unconstitutional provision of law is treated as a constitutional right flowing from Article 265 or as a statutory right/equitable right affirmed by Section 72 of the Contract Act, the result is the same - there is no automatic or unconditional right to refund. 13. Two Judges (Justice Paripoornan, and Justice Hansaria) who had different opinion on the matter recorded their views in detail in paras 137 and 138 as re-produced below: Category (III) Mistake of law -The levy or imposition was unconstitutional or illegal or not exigible in law (i.e. 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 Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t can accrue only if the earlier assessment or order in respect of person claiming refund is specifically recalled and annulled in accordance with law and no automatic refund will follow. 15. As regards the decision in the case of Nataraj and Venkat Associations relied upon by the Advocate for respondent it is to be noted that this decision is by a Court exercising writ jurisdiction. The decision of the Apex Court in the case of Mafatlal Industries Ltd does not appear to be brought to the notice of the court. It is case where affected party filed writ petition about tax paid by them. 16. In the case of Binani Zinc Ltd is also by a Court exercising writ jurisdiction. The Court had taken note of the decision of the Apex Court in the case of Mafatlal Industries Ltd. The Court found it proper to restrict the period of refund to be allowed to three years prior to the date of filing of the writ petition. 17. As already stated I do not consider it necessary to discuss the orders cited by the Respondent prior to the decision in Mafatlal Industries Ltd and orders by Tribunal in this matter. 18. I am of the view that in the case of Indian National Ship Owners Association, the Hon. B ..... X X X X Extracts X X X X X X X X Extracts X X X X
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