TMI Blog2017 (9) TMI 1324X X X X Extracts X X X X X X X X Extracts X X X X ..... pugned orders cannot be sustained. Appeal allowed - decided in favor of appellant. - Service Tax Appeal Nos. ST/75949/16 & 75953/2016 - Final Order No. FO/A/76788-76789/2017 - Dated:- 25-8-2017 - Shri P. K. Choudhary, Hon ble Judicial Member Sri Ankit Kanodia, C.A. For Appellant Sri K. Chowdhuri, Supdt. (A.R.) For Respondent ORDER The appellant filed these appeals against the rejection of refund claims as time barred under Section11B of the Central Excise Act, 1944. 2. It is admitted in the Adjudication order that the appellant paid Service Tax under Reverse Charge Mechanism for Goods Transport Agency service for transportation of food stuff (Biscuits) which had been exempted from the levy of the Service Tax w.e.f. 01/04/2013 vide Notification No.03/2013-ST dated 01/03/2013 and the appellant is eligible for getting refund of Service Tax in terms of the said Notification. But, the Adjudicating Authority partly rejected the refund claim since the refund is time barred under Section 11B of the Central Excise Act, 1944, which was upheld by the Commissioner (Appeal). Hence the appellant filed these appeals. 3. The Ld. Counsel appearing on behalf of the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f law, can be retained by them and the limitation under section 11B would apply. I find that this issue has been discussed by the various judicial authorities, some of them are required to be mentioned as under:- (i) In the case of Geojit BNP Paribas Financial Services Ltd. Vs. CCE, Customs Service Tax, Kochi [2015 (39) STR 706 (Ker), the Hon ble Kerala High Court after considering the decision of the Hon ble Supreme Court in the case of Mafatlal Industries Ltd. (supra) observed that when payment was effected, if it has no colour of legality, section 11B is not attracted. In that case, the assessee made an application for refund of Service Tax for the reason that they need not pay the same. The said application was rejected as it was filed beyond one year from the relevant date. For the proper appreciation of the case, the relevant portion of the said case is reproduced below: 7. Coming to Section 11B, before it was amended by Act 40 of 1991, it read as follows (again omitting portions not necessary for the present purposes) : 11B. Claim for refund of duty. Any person (1) claiming refund of any duty of excise may make an application for refund of such duty to the As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ii) The Hon ble Madras High Court in the case of Natraj Venkat Associates (supra) after considering the decision of the Hon ble Supreme Court observed that if what was paid cannot be taken as duty of excise, the bar of limitation under section 11B , cannot be applied. In that case the petitioner paid the Service Tax. But after realising that the services rendered for the construction of the building in Sri Lanka would not attract Service Tax, they filed refund claim which was rejected as barred by limitation under section 11B of the Act, 1944. The relevant portion said decision is reproduced below: 10. I have carefully considered the rival submissions. Sub-section (1) of Section 11B deals only with a claim for refund of any duty of excise. But unfortunately, the word duty is not defined under the Act. In Chhotabhai Jethabhai Patel and Co. v. Union of India [1999 (110) E.L.T. 118 (S.C.) = AIR 1962 SC 1006], a Constitution Bench of the Supreme Court pointed out with reference to Entry 84 of List I of Schedule VII of the Constitution that a duty of excise is a tax-levy on home produced goods of a specified class or description, the duty being calculated according to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... years, the Court has a discretion, having regard to the facts and circumstances of each case, not to entertain the application. 12. Though the above views were expressed in the context of a claim for refund arising out of a levy being declared unconstitutional, the views were based upon the theory of unjust enrichment and the principles incorporated in section 72 of the Contract Act. 13. In Union of India v. ITC Ltd [1993 (67) E.L.T. 3 (S.C.) = 1993 Supp. (4) SCC 326], the Supreme Court upheld the view taken by the Division Bench of the Delhi High Court with regard to the question of limitation. On the question of limitation, the Division Bench of the Delhi High Court had observed that the duty of excise is that which is levied in accordance with law and that any money which is realised in excess of what is permissible in law would be a realisation made outside the provisions of the Act. 14. Therefore, it is clear that if what was paid cannot be taken to be duty of excise, the bar of limitation under section 11B(1) cannot be applied. This is on account of the fact that the bar of limitation prescribed under Section 11B(1) applies only to any person claiming refund of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 17-9-2004 includes the building constructions which are for the use of organizations or institutions being established solely for the educational, religious, charitable, health, sanitation or philanthropic purposes and not for the purpose of profit, are not taxable being non-commercial in nature. It is also not in dispute that claim of the respondent before the concerned authority seeking refund of the above said amount was based on the above circular dated 17-9-2004 on the ground that the services are rendered for a non-profit organization. The department is also not denying that services rendered by the respondent by putting up constructions of several buildings stated above to the trust, which is a non-profit organization, hence, a non-profit service is not taxable. 13. According to the petitioner, above said amounts were paid under a mistaken impression that they were liable to pay such service tax and the amount of refund claimed by them was not charged by them and collected from the person to whom they rendered service. In other words, according to them, they have paid above said amounts under a mistaken notion that they were liable to pay even though they are not l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... den of service tax was passed on to any other person. As a matter of fact, the controversy in this appeal revolves around the maintainability of the very application filed under Section 11B of the Central Excise Act and whether Sec. 11 applies to the facts of the present case at all. In the case of Mafatlal Industries Ltd. v. Union of India (supra), the question was with regard to the refund of Central Excise and Customs Duties. It was held that all claims except where levy is held to be unconstitutional, is to be preferred and adjudicated upon under Section 11B of the Central Excise Act, 1944 or under Section 27 of the Customs Act, 1962 and subject to claimant establishing that burden of duty has not been passed on to a third party. In such circumstances, it was held, no civil suit for refund of duty is maintainable. It also observes that writ jurisdiction of High Courts under Article 226 and of Supreme Court under Article 32 remains unaffected by the provisions of Section 11B of the Act. It was further held that concerned Court while exercising the jurisdiction under the said articles, will have due regard to the legislative intent manifested by the provisions of the Act and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll have no application (Collector of Central Excise, Chandigarh) M/s. Doaba Co-operative Sugar Mills Ltd., Jalandhar [1988 (37) E.L.T. 487 (S.C.) = 1988 Supp. SCC 683]; Escorts Ltd. v. Union of India Ors. [1994 Supp (3) SCC 86] Rule 11 before and after amendment, or Section 11B cannot affect Section 72 of the Contract Act or the provisions of Limitation Act in such situations. My answer to the claims for refund broadly falling under the three groups of categories enumerated in paragraph 6 of this judgment is as follows : Where the levy is unconstitutional - outside the category (I) provisions of the Act or not contemplated by the Act - In such cases, the jurisdiction of the civil courts is not barred. The aggrieved party can invoke Section 72 of the Contract Act, file a suit or a petition under Article 226 of the Constitution and pray for appropriate relief inclusive of refund within the period of limitation provided by the appropriate law. (Dulabhais case (supra) - para 32 - clauses (3) and (4). (v) The Tribunal in the case of M/s. Monnet International Ltd. (supra) in the identical situation held that it is not a case of refund of tax, but return of deposit, for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... force, there is no bar to return of such amounts. Further, in the case of CCE, Jaipur-I v. Jai Laxmi Finance Co. - 2006 (3) S.T.R. 25 (Tri.-Del.), this Tribunal had again held that the amount collected without authority of law, the assessee is eligible for refund. In this case also, prior to 1-5-2006, the provisions of Service Tax were not applicable on the respondents and the amount paid as Service Tax was not payable by them at all. In that situation, the provisions of Section 11B of Central Excise Act, 1944 extended to the Service Tax are not applicable to this case. Hence, the bar of limitation is not applicable to this case. [Emphasis supplied] 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Chemicals Ltd. (supra) the Tribunal allowed the appeal of the assesse. In that case the appellant paid Service Tax on inward GTA service on the whole value of the service availed instead of 25% of the Service Tax as per Notification No. 32/2004. Their refund claim was rejected on the ground of limitation and unjust enrichment . The finding of the Tribunal are as under: 8. I have considered the submission made by both the sides and perused the record. The rejection of refund claim by ld. Commissioner on account of unjust enrichment, the order of review is not sustainable in the eyes of law as held by Hon ble High Court of Rajasthan in the case of Inani Carriers (supra), wherein the Hon ble High Court has held that the superior jurisdiction was capable of reversing, modifying or affirming the order which was not issued before it and in the present case ld. Commissioner (A) has declined to modify or simply affirm the order. Further, in the case of Shiva Builders (supra), the Hon ble High Court has framed following issue whether the Commissioner can pass order in revision under Section 84 of the Finance Act, 1994 when the issue of the appeal decided by the Commissioner (A) is en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y amount. Paid as service tax, the provisions of Section 11B of the Act are applicable. In that circumstances, the authorities below has rightly denied refund claim to the Appellant. 6. Heard the parties and considered the submissions. 7. Considered the submission of both the sides. 8. In this case the appellant was not a liable to pay service tax at all. Therefore, the amount paid by the appellant towards service tax is not service tax, consequently, the provisions of Section 11B of the Act are not applicable as held by this Tribunal in the case of M/s. Gulshan Chemicals Private Limited (Supra). In these circumstances, the bar of limitation is not applicable to the facts of this case. Consequently, the order of rejection of refund claim on the ground of limitation is set-aside. Accordingly, it is held that appellant is entitled for refund claim. 8. The ld.A.R. submitted that every refund arising within the statute has to be claimed in accordance with Section 11B of the Act as settled by the Hon ble Supreme Court in the case of Mafatlal Indus.(supra). I find that the Hon ble Supreme Court in the case of Mafatlal Industries (supra) held that any and every claim f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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