9911796707
TMI Blog2023 (12) TMI 1216X X X X Extracts X X X X X X X X Extracts X X X X ..... Evasion wing of the Service Tax Department conducted investigations into the Service Tax matters of the Appellant covering the relevant Period for which the said Invoice pertained. The Investigations concluded in the month of July 2019 and the investigating authorities were apparently satisfied with the issuance of the said invoice and its subsequent cancellation as no remarks contrary to the same were recorded. The Appellant states that after the conclusion of investigation in July 2019, the refund claim was filed on 29.11.2019 for refund of the amount paid against the said invoice since no service had been provided, and consequently, no consideration had been received from the recipient-client. 3. The period involved was post 2012 and the definition of "service" during the relevant point in time as per Section 65 B of the Finance Act, 1994 contemplated any activity carried out by a person for another person for consideration. In this case there is no consideration, and therefore, there is no service. In the present case, as the amount was deposited in anticipation of a service, which was never provided, the amount so deposited did not partake the characteristics of Service tax. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en claimed as refund. The cancelled invoice was not part of the turnover in the Profit & Loss Account in the concerned financial year. Hence the present appeal by the appellant before this Tribunal. 7. Learned Advocate appearing on behalf of the Appellant submits that the Appellant had not provided the service to M/s Kings Empire Heights Pvt. Ltd. and therefore, had canceled the tax invoice issued by the Appellant. During the course of investigation, this fact was explained. However, to prove its bonafides, the Appellant paid Rs.37,57,707/- vide Challan No 50064 dated 26.03.2018. Investigation got concluded in July 2019 but thereafter the Appellant was neither issued any show cause notice contemplating recovery of service tax along with interest and penalty for delayed payment nor was issued any order appropriating the amount paid by the Appellant as a service tax liability. Thus, the amount which was paid is not a tax amount in the absence of appropriation. The Appellant therefore filed refund claim which has been rejected on the ground of limitation by applying the provisions of Section 11B of the Central Excise Act, 1944 which inter alia are applicable only to the amount of Ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the character of tax but is simply an amount paid under a mistake of law. The provisions of Section 11B ibid would, therefore, not be applicable to an application seeking refund thereof. Moreover, since the retention of the amount in issue by the department is without authority of law, the question of applying the limitation prescribed under Section 11B ibid would not arise. Even in case where any amount is paid by way of self assessment, if it has been paid by mistake or through ignorance, it is always open to the assessee to bring it to the notice of the authority concerned and claim refund of the amount wrongly paid. For a service to be taxable, it is necessary that the service has to be rendered by one person to another and without a perceived service money contribution cannot be held to be a consideration which is liable to tax. The authority concerned is duty bound to refund such amount as retention of such amount would be in violation of Article 265 of the Constitution of India which mandates that no tax shall be levied or collected except by authority of law. Since Service Tax received by the concerned authority is not backed by any authority of law, in view of the provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 would indicate that the applicant was intending to claim refund of the duty with reference to Section 11B, therefore, now it is not open to him to go back and say that it was not refund of duty. No doubt in the present case, Form-R was used by the applicant to claim refund. It is the very case of the petitioner that they were exempted from 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emand 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 orders cannot be sustained and are set aside. The appeal filed by the appellant is allowed with consequential relief." ii. M/s Techno Power Enterprises Private Limited [Service Tax Appeal No. 75972 of 2021] "16. I also find that the Hon'ble Karnataka High Court, while considering the issue at hand, had laid down a test in such cases. The Hon'ble High Court had held that what needs to be ascertained is whether the Revenue could have recovered the amount had the assessee not paid it. In the present case, since the Appellant was not required to pay the amount so paid by them, such amount could not have been recovered by the Revenue and therefore, such amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 laches ... 12. Further, the claim of the respondent in refusing to return the amount would go against the mandate of Article 265 of the Constitution of India, which provides that no tax shall be levied or collected except by authority of law. 13. On an analysis of the precedents cited above, we are of the opinion, that when service tax is paid by mistake a claim for refund cannot be barred by limitation, merely because the period of limitation under Section 11B had expired. Such a position would be contrary to the law laid down by the Hon'ble Apex Court, and therefore we have n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... over 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 equity by asking those who claim the service of the judicial process to embrace the basic rule of distributive justice, while moulding the relief, by consenting to restore little sums, taken in little transactions, from little persons, to whom they belong." 15. The judgment of Mafatlal Industries vs. UOI [1997 5 SCC 536] = [1997 (89) ELT 247 (SC)] has been considered and interpreted by several judgments including the Karnataka High Court in KVR Construction supra, by this Tribunal in the case of ASL Builders supra, by CESTAT Delhi in Credible Engineering ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent no. 1 and Nagpur Municipal Corporation to buttress this argument is misconceived. Said clause helps respondent and he therefore submits that no substantial question of law arises in the present matter. 7. The other contention is about the period of limitation. The appellant argues that recovery of tax by them is covered under second type as shown by the judgment of Apex Court in Mafatlal Industries case (supra) particularly paragraph no. 27. The Apex Court found where the tax is collected by the authorities under the Act by misconstruction or wrong interpretation of the provisions of the Act, Rules and Notification or by an erroneous determination of the relevant facts i.e. an erroneous finding of fact, claim for refund arises under the Act. The Hon'ble Apex Court has considered unconstitutional levy in first category. Here, it is admitted that the tax could not have been demanded. We therefore find that situation is not covered by paragraph no. 27. The Hon'ble Apex Court has specifically addressed this issue in above mentioned judgment and its observations are also looked into by the Division Bench of the High Court of Delhi in the case of Hind Agro Industrie ..... X X X X Extracts X X X X X X X X Extracts X X X X
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