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TMI Blog2025 (5) TMI 645X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 of Finance Act, 2017 (FA, 2017). However, it was noticed that the refund application was time barred. Hence Show Cause Notice dated 14.3.2018 was issued to the appellant proposing to deny the entire amount of refund on the ground that the refund claim was filed with a delay of 31 days, beyond the time-limit stipulated under Section 104 of Chapter V of the Finance Act, 1994 ('Act'). After due process of law, the Original Authority rejected the entire refund claim on the ground of time bar. Aggrieved by the said order, the appellant preferred an appeal before the Ld. Commissioner (Appeals), who rejected the appeal on the same ground. Hence the present appeal before this Tribunal. The appellant also has filed a miscellaneous application dated 13.3.2024 seeking to file additional grounds, submitting that premium / development charges are not liable to service tax on renting of immovable property for our consideration. 3. Shri Raghavan Ramabhadra, Ld. Counsel appeared for the appellant and Smt. O.M. Reena, Ld. Authorized Representative appeared for the respondent. 3.1 Shri Raghavan Ramabhadra the Ld. Counsel for the appellant submitted that pursuant to the introduction of Section 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment charges are not liable to service tax, and any amounts collected as service tax were to be refunded. Hence, any amount paid towards service tax under an erroneous belief that the activity was exigible to service tax does not hold the character of 'service tax' and ought to be automatically refunded to the Appellant without subjecting the Appellant to the rigors of filing a refund claim and that the retention of any amounts paid by the Appellant will be without authority of law. He placed reliance on the below decisions for the proposition that amounts collected without the authority of law, cannot be subject to the statutory rigors of limitation: E) S. Sakthikumar vs. CCE, Madurai - 2022 (61) G.S.T.L. 364 (Tri. - Chennai) (paragraph 6). F) PKF Sridhar & Santhanam LLP vs. CCE - 2022 (58) G.S.T.L. 423 (Tri. - Chennai) (paragraph 7). G) Wolkem India Limited vs. Commissioner of Customs, Tuticorin - 2019 (368) E.L.T. 1090 (Tri. - Chennai) (paragraphs 8.1, 8.2). H) Mera Baba Realty Associate (P) Ltd. vs. CST - 2017 (49) S.T.R. 257 (Del.) (paragraph 9). He stated that as per Section 17(1)(c) of the Limitation Act, the period of limitation in an application filed for obtainin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... development charges during the period starting with 1-6-2007 to 21- 9-2016 (both days inclusive). The said Finance Act inserting the above section 104 received assent of the President of India and become effective from 1.4.2017. Whereas the assessee has filed refund claim of Rs.1,79,46,788/- on 31.10.2017 which is beyond 6 months' time limit prescribed under Sec.104(3) and, hence, hit by time bar. i.e. the last date to file the present Refund claim of Rs. 1,79,46,788/- is 30.09.2017, whereas the assessee has filed the Refund claim on 31.10.2017 i.e. beyond the time limit, which attracts time bar, hence it appears that the assessee is not eligible for refund due to time bar. 4. As per the claim of the assessee, they have paid service tax to SIPCOT and in tum SIPCOT paid Service Tax to the Department. Whereas the assessee did not furnish any evidence proving that the said service tax not passed to anyone and that 'unjust enrichment' is not applicable in their case." 4.1 The OIO dated 19.07.2018, while accepting that the rule of unjust enrichment was not applicable in the case, at para 9(a), has rejected the refund claim on the grounds of time bar without examining th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... who have allotted industrial plots either on long term lease or otherwise. 9. Regarding the contention of the appellant that they had provided bonafide reasons for the delay in filing of refund application, I agree with the impugned order that the stated reasons are not valid grounds for delay in filing of the claim. In respect of the case laws cited by the appellant I find that the original authority has countered all these citations and came out with a reasoning how the same could not be made applicable in the instant case which is found acceptable. 10. In view of the above, I do not find any infirmity in the impugned order and find that the appeal is liable for rejection." The appellant before us, has prayed that the impugned order dated 28.12.2018 may be set aside with consequential relief. 4.2 We find that the appellant has not contested that there has been a delay in filing the refund claim. Their main plea is; i) The claim should have been filed by SIPCOT who had deposited the service tax with the Government. SIPCOT's 'administrative delay' in asking them to file the refund claim has resulted in the claim being filed 6 months after the passing of the Finance Bill, 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant had not paid the tax to the Government account, in relation to which he is seeking refund and he has no locus standi to file the refund claim in terms of section 11B(1) (emphasis added) 5.2 Section 11B(1) of the CEA 1944, which pertains to the claim for refund of duty and interest, states that 'any person' claiming refund of any duty of excise and interest, if any, paid on such duty may make an application for refund 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. The expression "any person" is of wide amplitude. The Act thus does not confine a claim of refund only to the person who has collected and deposited the tax in the government coffers. However, section 12B of CEA 1944, contains an important presumption that needs to be overcome before sanction of refund to an applicant. 5.3 As per section 12B of CEA 1944, the presumption is that the incidence of duty has been passed on to the final buyer. Every person who has paid duty, unless the contrary is proved by him, is deemed to have passed on the full incidence of such duty to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fication would definitely assist the Revenue in finding out whether the manufacturer or buyer who makes an application for refund are being unjustly enriched. If it is not possible to identify the person/persons who have borne the duty, the amount of excise duty collected in excess will remain in the fund which will be utilized for the benefit of the consumers as provided in Section 12-D." (emphasis added) 5.6 From the discussions above, it is clear that it is the appellant who has borne the ultimate incidence of the tax, and not the Trust, who is the eligible claimant of the refund and is not barred from claiming the same. Further the question of unjust enrichment also does not arise as the amount has been paid from the appellants own resources and has not been shown to have been passed on. The appeal on this issue hence succeeds. 5.1 The legal position that a consumer of goods (which now includes services) could claim refund was clarified by the Hon'ble Supreme Court as early as 1997 in its judgment in Mafatlal Industries. Hence when a special section was introduced for claiming refund within a limited period, it was widely publicized and it was for the parties concerned to ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... forming any official duty. For example, a certificate for the nonuse of the duty paid towards availing credit or reversing credit etc. from the next stage buyer / consumer or a Chartered Accountant. Statutory timelines are not to be circumvented in a manner allowing unscrupulous / clever applicants to seek concessions or those who have slept over their rights to revive stale claims, at a later date. Further the appellant in their written submission refers to delay in filing the claim as an 'administrative delay' by SIPCOT. There is nothing to show that the delay was administrative in nature, by way of any official / departmental impediment. The use of the colourable term appears to be meant to seek an advantage by clothing a delay as an official one and which is covered by judgments of Constitutional Courts. More so, they have not shown any letters / correspondences made by them to SIPCOT urging them to pay back the money collected from them as tax. 6.3 As regards the Tribunal judgments cited by the appellant, it is seen that in Sovereign Agrotech Refinery (supra), Dynamic Techno Medicals (supra) and Satyam Auto Components (supra), have been passed by the same Ld. Single Member. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure's failure to express itself clearly; i. If literal interpretation is manifestly unjust, which produces a result not intended by the legislature, only in such a case can the Court modify the language; j. Equity and taxation are strangers. But if construction results in equity rather than injustice, such construction should be preferred; k. It is not a function of the Court in the fiscal arena to compel the Parliament to go further and do more; l. When a word used in a taxing statute is to be construed and has not been specifically defined, it should not be interpreted in accordance with its definition in another statute that does not deal with a cognate subject. It should be understood in its commercial sense. Unless defined in the statute itself, the words and expressions in a taxing statute have to be construed in the sense in which the persons dealing with them understand, that is, as per the trade understanding, commercial and technical practice and usage." (emphasis added) [Also see: Judgment of a nine-judge Bench of the Hon'ble Supreme Court in Superintendent & Legal Remembrancer, State of West Bengal Vs Corporation of Calcutta - (1967) 2 SCR 170]. In Martin Burn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if and when questioned, has to be examined with reference to other provisions of the Constitution. Article 265 does not itself lay down any criteria for testing the validity of a statute. When it speaks of "law", it no doubt refers to a valid law but the validity of a law has to be determined with reference to other provisions in the Constitution. *****. *****. ***** 21. With respect to the second category of cases, there is a good amount of controversy. While the Union of India says that such claims of refund should be put forward and determined only under and in accordance with the provisions of the Act and the Rules, the contention of the appellants-petitioners is that even in such cases a suit or writ is maintainable on the ground that the tax has been collected without the authority of law, i.e., contrary to Article 265 of the Constitution. In other words, while according to the Union of India, such claims of refund should be filed within the time prescribed by the Act and the Rules and should and can be dealt with only under the provisions of the Act and the Rules, the appellants-petitioners say that such claims can be made in suits and writ petitions as well and that to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onstituted, 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, at all points of time, it must be held that any and every ground including the violation of the principles of natural justice and infraction of fundamental principles of judicial procedure can be urged in these appeals, obviating the necessity of a suit or a writ petition in matters relating to refund. Once the constitutionality of the provisions of the Act including the provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rticle 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 39 - an aspect dealt with at some length at a later stage. The very concept of economic justice means and demands that unless the claimant (for refund) establishes that he has not passed on the burden of the duty/tax to others, he has no just claim for refund. It would be a parody of economic justice to refund the duty to a claimant who has already collected the said amount from his buyers. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed and adjudicated under the refund provisions of the Central Excises and Salt Act 1944 (as made applicable in Service Tax matters also) or the Customs Act 1962, as the case may be. 7.3 It is also noticed that a Larger Bench of this Tribunal in Veer Overseas Ltd. v. CCE, Panchkula decided on 27 March, 2018, [2018 (4) TMI 910 - CESTAT Chandigarh] heard the following reference; "(a) Whether in respect of the claim for refund of illegal levy of Service Tax or of Service Tax collected without authority of law, the statutory time limit prescribed in terms of Section 11B of Central Excise Act 1944 will be applicable or not?". The majority of two Members discussed the Mafatlal Judgment and held that the statutory limit prescribed in section 11B of the Excise Act would be applicable to refunds claimed for payments relating to FA, 1994, relying on the Supreme Courts judgment in Mafatlal Industries. They held as under; 9. The Apex court in Mafatlal Industries Ltd. (supra) observed that the Central Excise Act and the Rules made thereunder including Section 11B too constitute "law" within the meaning of Article 265 and that in the face of the said provisions - which are exclusive in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icant has discovered the mistake 8.1 The Finance Act 1994, is a self-contained Code exhaustive of the matters dealt with therein. The purpose of the Act is to levy a tax on service, assess and collect the same. It follows, therefore, that all the provisions contained in the Act have been designed with the object of achieving that purpose. We find that the Hon'ble Supreme Court in Sakuru Vs Tanaji [AIR 1985 SUPREME COURT 1279], examined the applicability of the Limitation Act 1963, before bodies other than Courts such as quasi-judicial Tribunals or executive authorities. It held: 3. After hearing both sides we have unhesitatingly come to the conclusion that there is no substance in this appeal and that the view taken by the Division Bench in Venkaiah's case is perfectly correct and sound. It is well settled by the decisions of this Court in Town Municipal Council, Athani v. Presiding Officer, Labour Court, Hubli (1970) 1 SCR 51 : (AIR 1969 SC 1335), Nityananda M. Joshi v. Life Insurance Corpn. of India (1970) 1 SCR 396 : (AIR 1970 SC 209) and Sushila Devi v. Ramanandan Prasad (1976) 2 SCR 845 : (AIR 1976 SC 177) that the provisions of the Limitation Act, 1963 apply only to pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 93 of the Act did not have the effect of rendering the provision of Sec. 5 of the Limitation Act, 1963 applicable to the proceedings before the Collector. 8.2 Again a three Judge Bench of the Supreme Court in COMMISSIONER OF CUSTOMS AND CENTRAL EXCISE Vs M/s HONGO INDIA (P) LTD [2009-TIOL-48-SC-CX-LB], examined the issue of the Limitation Act being applicable to Central Excise matters. The Hon'ble Court held; 20) Though, an argument was raised based on Section 29 of the Limitation Act, even assuming that Section 29(2) would be attracted what we have to determine is whether the provisions of this section are expressly excluded in the case of reference to High Court. It was contended before us that the words "expressly excluded" would mean that there must be an express reference made in the special or local law to the specific provisions of the Limitation Act of which the operation is to be excluded. In this regard, we have to see the scheme of the special law here in this case is Central Excise Act. The nature of the remedy provided therein are such that the legislature intended it to be a complete Code by itself which alone should govern the several matters provided by it. If ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid for the long- term lease allotted by SIPCOT to the Appellant, namely development charges or premium, is not exigible to service tax. 9.1 We find that the SCN issued in this case did not make out a charge regarding the levy of tax. The Original Authority and the Ld. Commissioner Appeals has accordingly not discussed the issue on the merits of the levy. Hence the plea of the appellant on the exigibility of the activity to service tax submitted in the miscellaneous application filed by them is found to be beyond the SCN and is rejected as inadmissible at this stage as it would allow a totally new proceedings to be started. 9.2 Apart from our own findings, we find that the dispute in T.V.M. Edible Oil (supra) which was heard by three Members [which included Shri M Ajit Kumar, Member (Technical)], found that a refund claim was squarely covered by the provisions of section 104(3) of the Finance Act 1994 and the claim should be filed within six months from the date on which the Finance Bill 2017 received the assent of the President as stated there in. It is a well-accepted norm of judicial discipline that a Bench of lesser quorum / strength should follow the view taken by Bench of l ..... X X X X Extracts X X X X X X X X Extracts X X X X
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