2023 (5) TMI 95 - AT - Service Tax

Refund claim - payments made under protest - Time Limitation - Commercial Training or Coaching Services - tax on total amount collected from the students, or on only the amounts they receive from NIFE, which is 80% of the amounts collected from the students - cost of study materials are to be included in the gross value of taxable services or not - HELD THAT - The two instances that squarely apply in this case is either the date of Commissioner Appeals order as is stated at clause (ec) of Section 11B or the date of payment of duty as per clause (f) of Section 11B. If the amounts were to be considered as the tax amounts, then clearly the amounts collected by the department are liable to be refunded since the demands are set aside. But since the commissioner Appeals held that the excess amounts paid by the appellant are over and above the tax liability one has to see whether Section 11B is applicable at all. Section 11B clause (f) comes into play only if the amounts are considered to be payment of duty. In the impugned order it has been categorically that the amounts paid by the appellant is an excess amount over and above the tax liability - it has been categorically held relevant date as stipulated in Section 11B (as made applicable to service tax matters) is not applicable wherein the amounts are paid in excess and collected without any authority of law. The Hon ble Madras High Court in the case of THE COMMISSIONER OF CENTRAL EXCISE, CHENNAI VERSUS M/S. ELECTRO STEEL CASTINGS LTD CESTAT, CHENNAI 2013 (8) TMI 199 - MADRAS HIGH COURT has held that Thus, the facts involved in both the cases decided by the Supreme Court were identical and the Supreme Court, while dealing with the issue relating to period of limitation, uniformly held that no limitation was applicable to the payment made under protest. The Hon ble Supreme Court in the earlier judgment clearly observed that the payment made, when the assessee has been challenging the earlier levy of duty, is deemed to be under protest and not otherwise. Hence, the combined appreciation of both the cases decided by the Supreme Court would lead to an irresistible inference that the payment made herein is also deemed to be under protest and no limitation is applicable and the claim is maintainable and is rightly decided by the CESTAT . The facts of this case are similar to the above where the Appellant had challenged the levy of duty and therefore, any payments made are deemed to be made under protest. His challenge against the demand was decided in favour of the Appellant which resulted in the refund claim - the refund claims filed by the Appellant is allowed.

Summary

Issues:
1. Relevant date for filing refund claims under Section 11B of Central Excise Act, 1944.
2. Whether excess amounts paid by the appellant are refundable.

Analysis:

Issue 1: Relevant date for filing refund claims under Section 11B:
The case involved determining the relevant date for filing refund claims under Section 11B of the Central Excise Act, 1944. The Appellant filed refund claims after the Commissioner (Appeals) set aside demands related to service tax. The dispute arose regarding the relevant date for filing these claims. The Commissioner (Appeals) rejected the claims, citing the date of payment of tax as the relevant date, as the claims were beyond one year from that date. The Appellant argued that the relevant date should be the date of the Commissioner (Appeals) order. The Tribunal analyzed Section 11B and relevant case laws to determine the applicable date. The Tribunal found that the excess amounts paid by the appellant were not considered as payment of duty, and therefore, the relevant date should be the date of the Commissioner (Appeals) order, as per Section 11B clause (ec). The Tribunal concluded that the impugned order's decision on the relevant date was not sustainable, and directed authorities to refund the amount to the Appellant within three months.

Issue 2: Whether excess amounts paid by the appellant are refundable:
The Appellant contended that the excess amounts paid by them were refundable as they were not related to tax liability but were paid under compulsion. The Appellant argued that the department compelled them to pay more than the actual tax liability, and now, after the Commissioner (Appeals) ruled in their favor, the refund claims were rejected on the grounds of voluntary excess payment. The Tribunal considered various case laws cited by the Appellant, including PKF Sridhar & Santhanam LLP and Way2wealth Brokers (P) Ltd., which highlighted that payments made under mistake or without authority of law were refundable. The Tribunal also referred to a judgment by the Madras High Court in a similar context. Based on these precedents, the Tribunal held that the excess amounts paid by the Appellant, challenged under protest, were not liable to limitation under Section 11B. The Tribunal allowed the refund claims, emphasizing that the payments made by the Appellant were not towards any taxable service and fell under the category of unauthorized collection of tax.

In conclusion, the Tribunal set aside the Commissioner (Appeals) order and directed the authorities to refund the excess amounts paid by the Appellant within three months from the date of the Tribunal's order.