TMI Blog2018 (8) TMI 614X X X X Extracts X X X X X X X X Extracts X X X X ..... rvice tax which was paid as per the law prevailing at the relevant time, but which became refundable on account of retrospective amendment in the law. The CPWD instead of applying for refund, itself insisted that the petitioner must apply and when the petitioner’s application for refund was rejected by the Assistant Commissioner of Service Tax, Ajmer, CPWD found a novel way to recover the same from the petitioner by utilizing the petitioner’s security deposit, unpaid amounts of final bill and the petitioner’s running bills of other contracts. These are wholly impermissible means of recovery. There is no iota of doubt that this Court has territorial jurisdiction to examine the legality of the action of CPWD - The orders passed by the Assistant Commissioner of Central Excise & Service Tax, Ajmer of course have a territorial origination outside the State, however, these two actions and orders are inter-linked and cannot be separated one from the other for testing the legality. The proceedings are placed back before the Assistant Commissioner of Central Excise & Service Tax, Central Excise& Service Tax Division, Ajmer [Rajasthan]. It would be open for the CPWD to join in the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ( a) a civil structure or any other original work 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 to 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 the 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. As per this provision therefore, with retrospective effect, CPWD was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervice Tax, Ajmer in which besides raising legal contention in respect of the refund claim, the petitioner made the following prayer : [ i] Allow the refund claim of ₹ 66,68,294/= on the basis of above submission. [ ii] Noticee may be heard in person before taking any adverse decision in the matter. [ iii] Without prejudice to the above, noticee request you to refund a sum of ₹ 66,68,294/= directly to CPWD, IIT, Gandhinagar and in that case, we will not be required to pass refund to CPWD, IIT, Gandhinagar through us. Thus, under this letter, the petitioner made it abundantly clear that the refund amount is not claimed by the petitioner. Its claim is for and on behalf of the CPWD, IIT, Gandhinagar and the petitioner would have no difficulty, if such amount is directly paid to the CPWD, IIT, Gandhinagar. The respondent no. 4, however, rejected such refund application by an Order dated 25th November 2016. In such order, his principal objection was on the principle of unjust enrichment. On merits, he was convinced that the refund of service tax paid is otherwise due and payable. He observed as under :- I observed that the taxable services ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, CPWD, Ahmedabad respectively which was submitted by the assessee, ledger account of IIT Gandhinagar Project from 01.04.2014 to 18.03.2016 and relevant portion of Bank statement of the assessee issued by Baroda Rajasthan Kshetriya Gramin Bank, Viashali Nagaar, Ajmer submitted by them. The assessee has paid the service tax ₹ 59,81,343/= for the period from April 2015 to December 2015 in the months of December 2015 and January 2016 vide various GAR-7 challans which were verified from NSDL by the JRO, I find that the agreement was made between them prior to 01.03.2015 the work covers by sub-clause (a) of Clause [1] of Section 102 of the Finance Act, 1994. However, the service tax on the amount passed and paid after various deductions by the recipient of service have been deposited by the assessee under the cover of challans. I also find that the assessee vide their letter dated 28.09.2016 withdrawn the claim of refund of service tax amounting to ₹ 6,86,951/= which was deposited by the sub-contractor, namely M/s. Mahindra Electric Stores, Ahmedabad vide GAR-7 CIN 5102470412201553817. The same is liable for rejection. Thus, the claim of ₹ 59,81,343/= is admissible ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee from 06.01.2016 to 04.02.2016 alongwith relevant portion of bank statement issued by Baroda Rajasthan Kshetriya Gramin Bank, Vaishali nagar, under which service tax is credited (Supra). From the above, it is established that the assessee have collected the amount of service tax from the service receiver. I also observe that the submissions made by the assessee vide their reply to the show cause notice are not tenable as the same are made without any documentary evidence. Therefore, the service tax refund claim amounting to ₹ 59,81,343/- held liable to be sanctioned on merit is required to be credited to the Consumer Welfare Fund as stipulated under Section 11B(2) of the Central Excise Act, 1944 made applicable to the service tax matters by virtue of Section 83 of the Finance Act, 1994 as the assessee have failed to rebut the presumption of unjust enrichment. In view of foregoing discussion and findings, I hold that the refund claim of ₹ 59,81,343/- (Rupees Fifty Nine Lac Eighty One Thousand Three Hundred Forty Three only) is liable to be credited in the Consumer Welfare Fund in terms of the provisions of Section 11B(2) of the Central Excise Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , request has been made to other CPWD Division where the petitioner is presently working. Since, the clause 29/29A provides for such an action and action taken by the respondents is well within the ambit of terms of contract the said action cannot be said to be illegal, arbitrarily and unjust. Having heard learned advocates for the parties and having gone through the documents produced on record, we find that the stand of CPWD is wholly unjust and unreasonable. We have noticed that in the execution of works contract for CPWD; as per the then prevailing law, the service tax was collected by the petitioner and deposited with the Government revenue. Subsequently, however, the law was amended by virtue of which, in relation to the construction carried out by the petitioner for CPWD, service tax was exempted with retrospective effect. It is undisputed position that such tax was not required to be paid. The amended provision also envisaged refund of service tax already paid, if application is filed within prescribed time. The order passed by the respondent no. 4-Assistant Commissioner of Central Excise Service Tax, Ajmer also supports this proposition in the above quoted po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rson, other than the manufacturer, the date of purchase of the goods by such person . Explanation [B] defines relevant date . Though this date has reference to the calculation of limitation period for the purposes of seeking refund of the duty under the aforesaid provision. However, clause (e) while stating the relevant date clarifies that in case of a person, other than the manufacturer, the date of purchase of goods by other person would be the relevant date. This itself indicates that the person can be other than the manufacturer and Explanation [B] caters to such other person. 8. It is not even necessary to embark on detailed discussion on this aspect inasmuch as we note that the Constitution Bench of this Court in Mafatlal Industries Limited vs. Union of India has already settled this aspect in the following words : 108. (xii) Section 11-B does provide for the purchaser making the claim for refund provided he is able to establish that he has not passed on the burden to another person. It, therefore, cannot be said that Section 11-B is a device to retain the illegally collected taxes by the State. This is equally true to Section 27 of the Customs Act, 196 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service tax burden, as duty was to be collected from the service recipient and to be deposited with the Government revenue, if the service tax was payable. If the amount was refunded by the Service-tax Department, it was the duty of the petitioner to ensure that the same reaches the service recipient. If, however for whatever reason, the refund is not granted, surely the petitioner cannot be asked to bear the burden thereof. Strangely, the service tax department holds that if the refund is granted, the petitioner would retain it and therefore benefit unjustly, and therefore, does not granted refund, citing it a case of unjust enrichment. The CPWD holds a belief that whatever be the reason for the petitioner not being able to retrieve such amount from the service tax department, the CPWD must get it back; even if it is from the petitioner personally. In the process, if we allow this situation to prevail, the petitioner would end up losing the service tax component from his profit which in the first place was not the liability of the petitioner. Instead of a case of unjust enrichment, it would be a case of unjust impoverishment. The respondent no. 4 was also not correct in his ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner of Central Excise Service Tax, Ajmer of course have a territorial origination outside the State, however, these two actions and orders are inter-linked and cannot be separated one from the other for testing the legality. When the substantial, or in fact, the larger part of the cause of action can be said to have arisen within the State, we see no hesitation in exercising the jurisdiction even against the order passed by the Assistant Commissioner of Central Excise Service Tax, Ajmer. In the result, petition is disposed of with the following directions : [1] The order passed by the respondent no. 4- Assistant Commissioner of Central Excise Service Tax, Central Excise Service Tax Division, Ajmer to the extent it holds that it is a case of unjust enrichment, and therefore, directs depositing of the said sum of ₹ 59,81,343/= to be credited in the Consumer Welfare Fund is declared to be illegal. The order is quashed, however, without disturbing the findings and observations on the allowability of the refund claim. The proceedings are placed back before the Assistant Commissioner of Central Excise Service Tax, Central Excise Service Tax Division, Ajmer [Rajas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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