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TMI Blog2023 (3) TMI 740X X X X Extracts X X X X X X X X Extracts X X X X ..... ty for its payment would be on the contractor (i.e. NOMC). In other words, NOMC was to statutorily discharge Service Tax liability and was to then reimburse itself of the same from the Appellant. NOMC is originally based out of Doha located in Qatar.However, it setup an establishment in India at Jodhpur and obtained Service Tax registration. NOMC raised four invoices dated 1.08.2014, 1.09.2014, 1.10.2014 and 1.11.2014 on the Appellant. On 8.03.2016, it discharged Service Tax amounting to Rs. 8,35,576/- and Rs. 7,87,669/- totalling to Rs. 16,23,245/-. The Appellant also discharged Service Tax of these very amounts on 5.12.2014 and 6.01.2015 after entertaining a view that it was liable to discharge Service Tax on reverse charge on the services received. Both NOMC and the Appellant deposited Service Tax with the Department. NOMC then followed up with the Appellant seeking a reimbursement of the Service Tax deposited by it, in terms of the aforesaid contract. Haliburton Offshore Services Inc 3. The Appellant entered into contract dated 12.08.2011 with M/s Haliburton Offshore Services Inc ('Haliburton') for the provision of 'Installation and Commission' services. Like NOMC, the claus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service provided and reversed it only when there was an objection raised by the Department. Finally, it was observed that the email from M/s Haliburton came on 29.04.2014 seeking release of payment of Service Tax portion for invoice no. 99418507. Thus, the Appellant should have applied for refund within the time frame stipulated in Section 11B of Central Excise Act. The Appellant appealed against OIO dated 31.08.2017 before the Commissioner (Appeals) Central Goods and Services Tax &Excise Dibrugarh. 6. The Commissioner (Appeals) vide Order in Appeal No. 06/DIB/CE(A)/GHY/18 dated 23.01.2018 dismissed the Appellant's appeal. The appellate authority relied on Section 68(2) of Finance Act, 1994 and Notification 30/2012 to hold that Service Tax was payable on reverse charge by the recipient from entities located abroad and thus the Appellant correctly discharged Service Tax. Reliance was further placed on SNC Lavalin Inc. vs. Commissioner Service Tax, Delhi - 2013 (32) STR 376 to hold that a project office cannot be called a permanent establishment of the company.However, this order is an order granting interim stay and cannot be considered to have precedential value. It was finally he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted by it in such a way that it also factored in the Service Tax paid by it on reverse charge. In any case, no such inference was sustainable because the price of crude oil is regulated by the Government based on international crude oil prices. Reliance was placed on Circular No. P-Excise 20012/11/2006-PP dated 01.05.2009 issued by the Ministry of Petroleum & Natural Gas which provided that only Sales Tax and Pipeline Transportation Charges are to be paid by the refineries (and not Service Tax). The above concept was reiterated yet again in Circular No. P-20012/11/2006-PP Volume 1 issued by Ministry of Petroleum and Natural Gas dated 21.03.2011. The Crude Offtake Sales Agreements between the Appellant and its subsequent buyers i.e. Indian Oil Corporation Limitedand Numaligarh Refinery Limited, based on the ratios of the aforesaid Circulars, also established that Service Tax never formed part of the valuation mechanism. For instance, clause 10.1 of the IOCL contract provides that the Appellant would bear all taxes except for those mentioned in Schedule B. A look at Schedule B would indicate that there was no mention of Service Tax whatsoever. Further, clause 4 of Schedule B provide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at when branch offices of foreign service providers obtained registration and discharged Service Tax in India on the transaction in question, the service recipient located in India (the assessee in that case) was not required to discharge the same,on reverse charge. The Tribunal was interpreting the language of the erstwhile Section 66A, which isparimateria to Explanation 4 to Section 65B(44). Relevant portions of the said judgement are extracted below:- "5. The only point for determination is the appellant's liability to service tax on reverse charge basis in terms of Section 66A. The admitted facts are that there is an agreement between the appellant and NOC BV, Netherlands. NOC BV, Netherlands has an establishment in India recognized by various authorities in terms of applicable regulations. The Indian establishment of NOC BV, Netherlands have registered themselves with the service tax department and remitted the full tax liability with reference to the impugned contract. The original authority while taking cognizance of the existence of NOC BV in India, proceeded to confirm the service tax demand on the basis that the agreement is with NOC BV, Netherlands and the consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : (1) Any person claiming refund of any duty of excise may make an application for refund of such duty to the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise before the expiry of one year from the relevant date in such form and manner as may be prescribed and the application shall be accompanied by such documentary or other evidence (including the document referred to in Section 12A) as the applicant may furnish to establish that the amount of duty of excise in relation to which such refund is claimed was collected from, or paid by, him and the incidence of such duty had not been passed on by him to any other person." 18. From the reading of the above Section, it refers to claim for refund of duty of excise only, it does not refer to any other amounts collected without authority of law. In the case on hand, admittedly, the amount sought for as refund was the amount paid under mistaken notion which even according to the department was not liable to be paid. 19. According to the appellant, the very fact that said amounts are paid as service tax under Finance Act, 1994 and also filing of an application in Form-R of the Central Excise Act wou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to demand refund of payment made by them under mistaken notion...." 19. The said principle was followed by this Tribunal in the following judgments: - i. M/s ASL Builders Private Limited vs. Commissioner of Central GST & CX, Jamshedpur [2020 (1) TMI 431 - CESTAT Kolkata] "13. The aforesaid propositions reveal that what one has to see is whether the amount paid by the assessee under a mistaken notion was payable or not. In other words, if the assessee had not paid those amounts, the authority could not have demanded from the assessee to make such payment. In other words, the department lacked authority to levy and collect such tax. In case, the department was to demand such payment, the assessee could have challenged it as unconstitutional and without authority of law. When once there is lack of authority to demand service tax or excise duty from the assessee, the department lacks authority to levy and collect such amount and the said amount is not "Service Tax" or "Excise duty" and Section 11B of the Act has no application in such cases. ... 19. In view of the above discussion and by respectfully following the judgements of the superior Courts, cited supra, the impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e were admittedly appellant had paid a Service Tax on Commercial or Industrial Construction Service even though such service is not leviable to service tax. We are of the view that the decisions relied upon by the Appellate Tribunal do not support the case of the respondent in rejecting the refund claim on the ground that it was barred by limitation. We are, therefore, of the view that the impugned order is unsustainable. 7. We accordingly allow the present appeals and quash and set aside the impugned order, insofar as it is against the appellant in both appeals. We fully allow refund of Rs. 8,99,962/- preferred by the appellant. We direct that the respondent shall refund the amount of Rs. 8,99,962/- to the appellant within a period of three months. There shall be no order as to costs." ii. 3E Infotech vs. CESTAT [2018 (18) GSTL 410 (Mad.)] "9. In the above cited case, the Supreme Court stated that the Assessee's claim to refund would not be disallowed solely because it seemed barred by limitation. Since the Assessee in that case made the claim for refund shortly after learning about their entitlement for the same, it would not be just to hold that such claim is hit by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said sum of Rs. 360.46 lakhs was paid by mistake by the petitioner to the Government of India, the latter instantly became a trustee to repay that amount to the petitioner. The obligation was a continuing obligation. When a wrong is continuing there is no limitation for instituting a suit complaining about it. (See Section 22 of the Limitation Act, 1963). The Supreme Court through Mr. Justice Krishna Iyer opined in Shiv Shankar Dal Mills v. State of Haryana reported in AIR 1980 Supreme Court 1037 as follows:- 1. Where public bodies, under colour of public laws, recover people's money, later discovered to be erroneous levies, the Dharma of the situation admits of no equivocation. There is no law of limitation, especially for public bodies, on the virtue of returning what was wrongly recovered to whom it belongs. Now is it palatable to our jurisprudence to turn down the prayer for high prerogative writs, on the negative plea of 'alternative remedy' since the root principle of law married to justice, is ubi jus ibiremedium. 2. Another point, in our jurisdiction social justice is a pervasive presence; and so, save in special situations it is fair to be guided by the strategy of e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the statutory limitation period would apply refunds of tax paid erroneously in its judgment in Southern Surface vs. Ast. Commissioner, Muvattupuzha - 2019 (28) GSTL 202 (Ker.)]. However, interesting, in the subsequent judgment of Uniroyal Marine Exports Ltd. Vs. CCE Kozhikode- 2021 (54) GSTL 156 (Ker.) it was held that if the Department had already granted a refund of the amount mistakenly paid by the assessee, the same is notto be recovered. 25. The judgments of CESTAT Mumbai in Benzy Tours vs. Commissioner of Service Tax Mumbai [2016 (43) STR 625 (Tri. Mum)], Casa Grande vs. Commissioner CGST Mumbai South[2019 (29) GSTL 349 (Tri.- Mum)] and Tanna Electric vs. Commissioner CGST Mumbai Central [2020 (35) GSTL 129 (Tri- Mum)] are contrary to the ratio of the jurisdictional High Court in Parijat Construction supra. 26. The judgment of the Hon'ble Delhi High Court in Jumax Foam Pvt. Ltd. vs. UOI [2003 (157) ELT 252 (Del.)] held that refunds could only be claimed under Section 11B. It is to be noted that the Petitioner in that case, was unable to discharge the burden of unjust enrichment in that case. However, subsequently the Hon'ble Delhi High Court in National Institute of Public ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 30781 of 2018 - Order dated 25.09.2020, there was a dissent between the members and the matter was referred to a Third Member. Relevant portions of the order are extracted below: - "(1) Whether the limitation prescribed under Section 11B of the Central Excise Act will not be applicable as the tax was paid erroneously though eligible to exemption and as such is in the nature of deposit and hence limitation is not attracted as held by Member (Judicial) following the ruling of Hon'ble Karnataka High Court in KVR Construction affirmed by Hon'ble Supreme Court 2018(14) STR 117 . OR Limitation prescribed under Section 11B is applicable as held by Member (Technical) in view of the ruling of Hon'ble Supreme Court in Mafatlal Industries Vs Union of India - 1997(89)ELT 247. Registry is directed to put up the appeal record before Hon'ble President for nomination of 3rd member to consider the aforesaid questions and difference of opinion for his opinion." 30. In reference, the Third Member vide Order dated 8.02.2022 passed a detailed judgment answering the reference and held that amounts paid under mistaken notions would not be hit by the statutory limitation period. This was no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... excise duty paid on rectified spirit because the respondent has not passed on the duty to any consumer of the final product, viz., copper, manufactured by the respondent. It has been stated in the said affidavit that the price of copper has always been fixed by the Mineral & Metal Trading Corporation (MMTC) on the basis of the prevailing price fixed by the London Metal Exchange (LME) and this was done not only for the period in question but also for prior and subsequent period and that only such price could be charged and that no part of the duty in respect of rectified spirit captively consumed in the manufacture of copper could be added to the price of copper which was fixed on the basis of the LME prices. We have no reason to doubt the correctness of the aforesaid statement contained in the said affidavit. In the circumstances, no case is made out for interference with the direction contained in the impugned judgment of the High Court regarding refund of excise duty paid by the respondent on import of rectified spirit used in the manufacture of copper. The appeals are, therefore, dismissed. No order as to costs." 34. In view of the above discussions, the present appeal is allo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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