TMI Blog2023 (8) TMI 702X X X X Extracts X X X X X X X X Extracts X X X X ..... advanced by the appellant or on his behalf by his counsel. Even if for a moment the argument advanced is accepted then also has to be shown that the amount claimed as refund was paid under mistake of law. Nothing has been produced in respect of payment of this amount as tax with the exchequer and if paid that tax was paid under mistake of law. Even no objection certificate from the builder who might have paid this tax in the exchequer has been produced - If the service tax paid in respect of first unit allocated has been adjusted against the tax due in respect of the second unit then where can be a question about refund to the appellant. No evidence to the contrary has been produced by the appellant. It is also noticed that it is a dispute between the appellant and the builder, two contracting parties. This dispute has to be resolved between two parties to the contract and no refund can be made treating the disputed amount as tax which was never paid to the exchequer. Thus, the appellant even after dismissal of this appeal should be allowed opportunity if he can at any time produce the documents claiming this amount is admissible in refund to him for the reason that this tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant. Even if the amount would have been deposited with the government exchequer the refund claim would be time barred as per provision of section 11 B of the Central Excise Act, 1944 (which is also applicable to Service Tax) as the refund claim was filed after lapse of more than 01 year from the date of payment of Service Tax. 10. In view of the above discussions and findings, the appeal bearing No.208/ST/Noida/APPL/NOI/2019-20 filed by M/s Shri Sumit Nagrath, F-140, Sector-41, Noida (UP) is rejected. 2.1 The appellant has filed a refund claim seeking refund of Rs.1,59,339/- claiming the same to be service tax paid by him against the flat booked at M/s Jaypee Infratech Ltd. Sector-128, Noida. 2.2 The appellant had booked a flat under construction project on M/s Jaypee Infratech Ltd. and was allotted unit bearing No.AMN010105 in AMAN-N01 letter dated 30.06.2017 issued by the Builder for sale consideration of Rs.35,40,874/-. 2.3 On request of appellant another unit was reallocated by the builder to the appellant for which Occupancy Certificate had already been issued by the Competent Authority on 20.02.2018. 2.4 Against the amount of Rs.31,64,162/- deposit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hequer are produced. The claim of the appellant that this amount was paid to exchequer as service tax under mistake of law is also not substantiated. The reliance placed by the appellant on the two decisions is totally erroneous. The refund claim not only on merits but also on limitation is not admissible to the appellant. Accordingly appeal may be dismissed. 4.1 I have considered the impugned order along with the submissions made in the appeal and during the course of argument. 4.2 The entire ground taken by the appellant is that as this has been paid under mistake of law refund claim could not have been hit by the limitation as provided under section 11B of Central Excise Act. For this proposition, the appellant relies upon two decisions referred. I do not agree that in case of mistake of law refund claim could be allowed beyond the period of limitation provided by the section 11B of Central Excise Act, 1944. A nine judge bench Hon ble Supreme Court has in case of Mafatlal Industries [1997 (89) E.L.T. 247 (SC)] held as follows:- 67 . The first question that has to be answered herein is whether Kanhaiyalal has been rightly decided insofar as it says (1) t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mption from duty and no court shall have any jurisdiction in respect of such claim. It started with a non-obstante clause; it took in every kind of refund and every claim for refund and it expressly barred the jurisdiction of courts in respect of such claim. Sub-section (3) of Section 11B, as it now stands, is to the same effect - indeed, more comprehensive and all-encompassing. It says, (3) Notwithstanding anything to the contrary contained in any judgment, decree, order or direction of the Appellate Tribunal or any court or in any other provision of this Act or the rules made thereunder or in any law for the time being in force, no refund shall be made except as provided in sub-section . The language could not have been more specific and emphatic. The exclusivity of the provision relating to refund is not only express and unambiguous but is in addition to the general bar arising from the fact that the Act creates new rights and liabilities and also provides forums and procedures for ascertaining and adjudicating those rights and liabilities and all other incidental and ancillary matters, as will be pointed out presently. This is a bar upon a bar - an aspect emphasised in P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such a situation, Proposition No. 3 enunciated in Kamala Mills becomes applicable, viz., where a statute creates a special right or a liability and also provides the procedure for the determination of the right or liability by the Tribunals constituted in that behalf and provides further that all questions about the said right and liability shall be determined by the Tribunals so constituted, the resort to civil court is not available - except to the limited extent pointed out therein. Central Excise Act specifically provides for refund. It expressly declares that no refund shall be made except in accordance therewith. The Jurisdiction of a civil court is expressly barred - vide sub-section (5) of Section 11B, prior to its amendment in 1991, and sub-section (3) of Section 11B, as amended in 1991. It is relevant to notice that the Act provides for more than one appeal against the orders made under Section 11B/Rule 11. Since 1981, an appeal is provided to this Court also from the orders of the Tribunal. While Tribunal is not a departmental organ, this court is a civil court. In this view of the matter and the express and additional bar and exclusivity contained in Rule 11/Section 11B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al limitations. This is a situation not contemplated by the Act. The Act does not contemplate any of its provisions being declared unconstitutional and therefore it does not provide for its consequences. Rule 11/Section 11B are premised upon the supposition that the provisions of the Act are good and valid. But where any provision under which duty is levied is found to be unconstitutional, Article 265 steps in. In other words, the person who paid the tax is entitled to claim refund and such a claim cannot be governed by the provisions in Rule 11/Section 11B. The very collection and/or retention of tax without the authority of law entitles the person, from whom it is collected, to claim its refund. A corresponding obligation upon the State to refund it can also be said to flow from it. This can be called the right to refund arising under and by virtue of the Constitutional provisions, viz., Article 265. But, it does not follow from this that refund follows automatically. Article 265 cannot be read in isolation. It must be read in the light of the concepts of economic and social justice envisaged in the Preamble and the guiding principles of State Policy adumbrated in Articles 38 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , five years, ten years, twenty years or even much later, a decision is rendered by a High Court or the Supreme Court in the case of another person holding that duty was not payable or was payable at a lesser rate in such a case. (We must reiterate and emphasise that while dealing with this situation we are keeping out the situation where the provision under which the duty is levied is declared unconstitutional by a court; that is a separate category and the discussion in this paragraph does not include that situation. In other words, we are dealing with a case where the duty was paid on account of mis-construction, mis-application or wrong interpretation of a provision of law, rule, notification or regulation, as the case may be.) Is it open to the manufacturer to say that the decision of a High Court or the Supreme Court, as the ease may be, in the case of another person has made him aware of the mistake of law and, therefore, he is entitled to refund of the duty paid by him? Can he invoke Section 72 of the Contract Act in such a case and claim refund and whether in such a case, it can be held that reading Section 72 of the Contract Act along with Section 17(1)(c) of the Limitati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claims within three years of such decision, irrespective of the fact that they may have paid the duty, say thirty years back, under similar provisions - and their claims are being allowed by courts. All this is said to be flowing from Article 265 which basis, as we have explained hereinbefore, is totally unsustainable for the reason that the Central Excise Act and the Rules made thereunder including Section 11B/Rule 11 too constitute law within the meaning of Article 265 and that in the face of the said provisions - which are exclusive in their nature - no claim for refund is maintainable except under and in accordance therewith. The second basic concept of law which is violated by permitting the above situation is the sanctity of the provisions of the Central Excises and Salt Act itself. The Act provides for levy, assessment, recovery, refund, appeals and all incidental/ancillary matters. Rule 11 and Section 11B, in particular, provide for refund of taxes which have been collected contrary to law, i.e., on account of a mis-interpretation or mis-construction of a provision of law, rule, notification or regulation. The Act provides for both the situations represented by Sections ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccordance or pursuant to the said provisions is collection or retention under the authority of law within the meaning of the said article. 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 universally, it will lead to unimaginable chaos. It is, however, suggested that this result follows only in tax matters because of Article 265. The explanation offered is untenable as demonstrated hereinbefore. As a matter of fact, the situation today is chaotic because of the principles supposedly emerging from Kanhaiyalal and other decisions following it. Every decision of this Court and of the High 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 27, application claiming refund as such, should be presented within a period of six months as envisaged. In the present case, the claim is barred by limitation. 3. The learned Counsel for Petitioner vehemently urged before us, that since the levying of duty itself was without any authority of tariff, Section 27 as such has no application. In the submission of learned Counsel normal period of limitation for recovery as described is 3 years. The submission is that the application of refund presented on 22-2-1987 (sic) was within the period of limitation of 3 years from the date of payment of duty and as such, it is not barred, in view of the period of limitation. 4 . The Limitation Act provides a period of limitation for initiating the proceedings for any recovery of claim in the Court of law. Making of such application for refund of customs duty would not be such a proceeding as envisaged of Limitation Act. As such, the period prescribed under the said Act has no application. Alternatively, the learned Counsel urged before us that the instant petition is within the period of limitation. 5 . Proceedings under Article 226 are not envisaged by the Limita ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstitutional for violation of any of the constitutional limitations. This is a situation not contemplated by the Act. We note in the present case there is no such situation of the provision of any tax levy, in so far as the present dispute is concerned, held to be unconstitutional. As already held that the appellant is liable to pay service tax on reverse charge basis but for the exemption which was not availed by them. We hold that the decision of the Tribunal in Monnet International Ltd. (supra) has no application to decide the dispute in the present referred case. We take note of the decision of the Tribunal in XL Telecom Ltd. (supra). It had examined the legal implication with reference to the limitation applicable under Section 11B. We also note that the said ratio has been consistently followed by the Tribunal in various decisions. In fact, one such decision reached Hon ble Supreme Court in Miles India Limited v. Assistant Collector of Customs - 1987 (30) E.L.T. 641 (S.C.). The Apex Court upheld the decision of the Tribunal to the effect that the jurisdictional customs authorities are right in disallowing the refund claim in terms of limitation provided under Section 27(1) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any person would be governed by the provisions of the Central Excise Act, 1944 as made applicable to refund under Finance Act, 1994 by virtue of Section 83 of the Finance Act, 1994. 22. Therefore, refund of tax if any borne by the petitioner had to be made only within a period of limitation prescribed under Section 11B of the Central Excise Act, 1944 notwithstanding the fact that the petitioner became aware of the wrong payment of tax only after the Central Board of Excise and Customs issued clarification bearing reference Order No.2/1/2002-S.T., dated 24-4-2002. Thus, the period prescribed under Section 11B of the Central Excise Act, 1944 had expired long before the above were clarification was issued. 23. The Hon ble Supreme Court in Commissioner v. Allied Photographics India (P.) Ltd., 2004 (166) E.L.T. 3 (S.C.) considered the case of distributor who had borne the incidence of tax and posed the following question:- The point which still remains to be decided is whether the respondent herein was entitled to refund without complying with Section 11B of the Act on the ground that it had stepped into the shoes of NIIL (manufacturer) which had paid the duty under prot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an Reddy in his majority judgment; concurred to by a majority of five out of nine, held the refund to be possible only under the provisions of the Act. We need only refer to the category of payment under a mistake of law. We do not agree with the Learned Single Judge that the facts of the case discussed in WP (C) No.18126/2015 do not fall under any of the categories. A payment made on a mistaken understanding of law finding the levy to be exigible for the services rendered, would be a levy made or paid under mistake of law and not one categorized as an unconstitutional levy or illegal levy. We cannot agree with the elastic interpretation made by the Learned Single Judge that the case would be one on account of mistake of fact in understanding the law. The mistake committed by the assessee may be one on law or on facts; the remedy would be only under the statute. Here we are not concerned with a case as specifically noticed in Mafatlal Industries Limited (supra) of an assessee trying to take advantage of a verdict in another case. Here the assessee had paid the tax without demur and later realised that actually there was no levy under the provisions of the statute. However, tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... later realised that they are entitled to exemption. Going by the majority judgment, in Mafatlal Industries Limited (supra), we have to find such cases being subjected to the rigour of limitation as provided under Section 11B. The limitation, in the relevant period, being one year, there could be no refund application maintained after that period. We, hence, find the order impugned in the writ petitions to be proper and we dismiss the writ petitions. We hold that the judgment dated 6-7-2015 in WP (C) No.18126/2015 [2015 (39) S.T.R. 706 (Ker.)] [M/s. Geojit BNP Paribas Financial Services Ltd. v. Commissioner of Central Excise] is not good law, going by the binding precedent in Mafatlal Industries Limited (supra). The writ petitions would stand dismissed answering the reference in favour of the Revenue and against the assessees 4.9 In view of decisions as above I do not find any merits in the arguments advanced by the appellant or on his behalf by his counsel. Even if for a moment the argument advanced is accepted then also has to be shown that the amount claimed as refund was paid under mistake of law. Nothing has been produced in respect of payment of this amount as tax with th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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