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TMI Blog2023 (5) TMI 975X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Central Excise Act, 1944 [the Excise Act] would not be attracted and so the respondent would be entitled to refund. The Commissioner (Appeals) relied upon a certificate issued by a Chartered Accountant as also the balance sheet to hold that the principles of unjust enrichment would not apply. 3. The respondent had filed the refund claim alleging that it had wrongly paid service tax under reverse charge mechanism as a service receiver under „manpower recruitment or supply agency‟ service defined under section 65(68) of the Finance Act, 1994 [the Finance Act] as provided under Notification dated June 20, 2012. The relevant portion of the said Notification is reproduced below : "1. The taxable services, - (A) (i) xxxxxx xxxxxx xxxxxx (ii) xxxxxx xxxxxx xxxxxx (iii) xxxxxx xxxxxx xxxxxx (iv) xxxxxx xxxxxx xxxxxx (v) provided or agreed to be provided by way of renting of a motor vehicle designed to carry passengers to any person who is not in the similar line of business or supply of manpower for any purpose or security services or service por ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the directions issued by the respondent and if the job assigned to the contractor was not satisfactory or in accordance with the specification, the contractor would have to alter, change or repair the same. 9. It is after perusal of both the agreements that the Commissioner (Appeals) observed as follows : "6.4.3 From both the above agreements it can simply be construed that the contractor (i.e M/s M.S. Enterprises in this case) has been assigned special task which the contractor has to complete in the premises of the Appellant by using his own manpower and that the Appellant will provide the requisite raw material and other infrastructural assistance to the contractor. I have also gone through the party wise ledge account maintained by M/s Afflatus International and find that the bills are raised for Fabrication & Tailoring and Contractor Labour etc. wherein the type of bills are shown as Misc. Job Work Bill." 10. This finding of the Commissioner (Appeals) does not suffer from any infirmity. 11. The finding recorded by the Commissioner (Appeals) that the work undertaken by the contractor in the premises of the respondent would amount to manufacture, has not been seriously di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom payment of such service tax by virtue of circular dated 17-9-2004 and this is not denied by the Department and it is not even denying the nature of construction/services rendered by the petitioner was exempted from to payment of Service Tax. What one has to see is whether the amount paid by petitioner under mistaken notion was payable by the petitioner. Though under Finance Act, 1994 such service tax was payable by virtue of notification, they were not liable to pay, as there was exemption to pay such tax because of the nature of the institution for which they have made construction and rendered services. In other words, if the respondent had not paid those amounts, the authority could not have demanded the petitioner to make such payment. In other words, authority lacked authority to levy and collect such service tax. In case, the department were to demand such payments, petitioner could have challenged it as unconstitutional and without authority of law. If we look at the converse, we find mere payment of amount, would not authorize the department to regularise such payment. When once the department had no authority to demand service tax from the respondent because of its cir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on would be contrary to the law laid down by the Hon‟ble Apex Court, and therefore we have no hesitation in holding that the claim of the Assessee for a sum of Rs. 4,39,683/- cannot be barred by limitation, and ought to be refunded." 18. The Bombay High Court in M/s Parijat Construction vs Commissioner of Central Excise, Nashik [2017-TIOL-2170-HD-MUM-ST] also took a similar view and the observations are as follows : "5. We are of the view that the issue as to whether limitation prescribed under Section 11B of the said Act applies to a refund claimed in respect of service tax paid under a mistake of law is no longer res integra. The two decisions of the Division Bench of this Court in Hindustan Cocoa (supra) and Commissioner of Central Excise, Nagpur v. M/s. SGR Infratech Ltd. (supra) are squarely applicable to the facts of the present case. 6. Both decisions have held the limitation prescribed under Section 11B of the said Act to be not applicable to refund claims for service tax paid under a mistake of law. The decision of the Supreme Court in the case of Collector of C.E., Chandigarh v. Doaba Co-Operative Sugar Mills (supra) relied upon by the Appellate Tribunal h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should have the colour of validity when it was paid and only consequent upon interpretation of law or adjudication, the levy is liable to be ordered as refund. When payment was effected, if it has no colour of legality, Section 11B is not attracted. This Court is also of the view that levy is not in accordance with the provisions of the Service Tax and therefore, such payment cannot be taken as a payment made relatable to Section 11B of the Central Excise Act." [emphasis supplied] 20. In G.B. Engineers vs Union of India [2016 (43) STR 345 (Jhar.)], the Jharkhand High Court observed that when the amount is not paid under the provisions of the Excise Act or the Finance Act, then if the amount is paid under a mistake, the same cannot be retained by the Government and the provisions of section 11-B of the Excise Act cannot be applied. The observations are as follows : "9. Section 11B of the Central Excise Act to be read with Section 83 of the Finance Act, 1994 are not applicable to the facts of the present case because, the amount paid by the petitioner is never under the Central Excise Tax nor under the service tax when there is no liability to make the payment of the amount and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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