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TMI Blog2013 (2) TMI 559X X X X Extracts X X X X X X X X Extracts X X X X ..... een appointed as the operator of the Block. 2.1 The appellant as an operator had entered into an agreement with M/s. Aban Offshore Ltd. for supply and operations of a 'Floating Rig' for use in its production activities. M/s. Aban Offshore Ltd. is a registered service tax assessee under the category "Mining Service" Storage and Warehousing Service, GTA Service, etc. M/s. Aban Offshore Ltd. had charged Service tax from the appellant for supply and operations of rig under "Mining Service" w.e.f. 1-6-2007. The appellant had filed a refund claim for Rs. 13,88,47,930/- on 5-5-2009 on the grounds that the Service tax on supply of rig is taxable w.e.f. 16-5-2008 only under the category "Supply of tangible goods" service and that they had been erroneously charged by M/s. Aban Offshore Ltd. under "Mining Service" and the same was paid by them erroneously for the period from 1-6-2007 to 15-5-2008 under the said category. 2.2 The appellant was issued with a show cause notice proposing to reject the refund claim on the following grounds : (a) M/s. Aban Offshore Ltd. who had collected service tax from the appellant and paid to the Department under Mining service ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion of the Lower Adjudicating Authority that the appellant has not proved with documentary evidence that it has not passed on the burden of tax to any other person. The appellant submitted that the concept of unjust enrichment is not applicable to their case for the following reasons : (a) It is clear from the relevant clauses of contract regarding price determination of oil, that the price in respect of crude oil produced is fixed based on the price quoted in the market and has no bearing whatsoever on cost of production of crude oil. Crude oil is a commodity item and the price of the commodity items are determined based on various market forces viz. demand and supply, competitors' activities. Govt. policies, etc. and these prices bear no co-relation to the costs incurred by the appellant. (b) Unjust enrichment inapplicable if price fixation is beyond control of appellant. (c) Unjust enrichment not applicable if collection of tax is illegitimate. (v) that they relied upon the following case laws in their defence : (i) Girish Fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case laws and the submissions filed oral as well as written. The issue to be decided in the instant case is whether the appellant as a service receiver is entitled for the refund claimed by him. In other words it has to be decided whether the activity of supply of floating rigs by M/s. Aban Offshore Ltd. is covered under the category "Supply of tangible goods" service as contended by the appellant or under the category "Mining service" as alleged by the Department. 5.1 I find from the records that the refund claim was rejected by the Lower Adjudicating Authority on the following grounds : (i) part of the claim hit by time-bar; (ii) the service provider had not raised the classification dispute; (iii) no documentary evidence had been produced by the appellant to show that the incidence of tax has not been passed on to any other person; (iv) Indian National Shipowners Association case had not attained finality; (v) disclaimer certificate from M/s. Aban had not been produced by the appellant. 5.2 The appellant's main contention is that the Service tax on supply of rig is taxable only w.e.f. 16-5-2008 under the category "Supply of tangible goods" service and that they had b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransferring right of possession and effective control of such machinery, equipment and appliance. According to the above definition, a service becomes taxable as supply of tangible goods service, when : Ø The service is provided in relation to supply of tangible goods Ø The supply is without transferring right of possession and effective control of goods Ø The service may be provided by any person to any other person. The taxability of 'supply of tangible goods services' would get attracted when a supply of tangible goods including machinery, equipment and appliances is made for the use of service recipient. From the above definition, I find that the taxable service covers where tangible goods are supplied without transferring possession and effective control thereof though the goods are made available to the service recipient for use. In the instant case, M/s. Aban had supplied floating rigs to the appellant for post extraction activity without transferring possession and effective control. 5.5 In the grounds of appeal as well as during the hearing, the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oduction of new entry and inclusion of certain services in that entry presupposes that there was no earlier entry covering such services - Section 66 of Finance Act, 1994. [para 38] Supply of Tangible Goods service - Mining service - Creation of new entry for Supply of Tangible Goods service not by amending earlier entry on Mining service and not by carving out of Mining service - Providing vessels on time charter basis without giving effective control not covered under Mining service - Sections 65(105)(zzzy) and 65(105)(zzzzj) of Finance Act, 1994. [paras 38, 48]." "Mining service - Supply of Tangible Goods service - Service tax liability during period from 1-6-2007 to 15-5-2008 - Appellant contending that members of respondent-association liable to Service tax for impugned period under Mining service though liable under Supply of Tangible Goods service after amendment from 16-5-2008 - Scope of work relating to providing vessel - Nature of work in terms of contract with ONGC indicating that none of the work can be strictly said to be service in relation to mining of mineral, oil or gas - Nature of work as per records not even remotely connected and included within expression fou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service is classifiable under two or more sub-clauses of clause (105) of Section 65, Classification shall be effected to the sub-clause which provides the most specific description to sub-clauses providing a more general description. From the above definitions, I find that the activity of supply of floating rigs by M/s. Aban Offshore Ltd. to the appellant is more specifically covered under the category "Supply of tangible goods service". Thus, I hold that the appellant is not liable to pay service tax on the supply of floating rigs to M/s. Aban for the disputed period. Hence, the appellant has erroneously paid the service tax for the disputed period and the appellant is right in claiming the refund. 6. I find from the records that the refund claim was rejected partially on the grounds that it is hit by time limitation. The remaining part of the claim is rejected on the grounds as mentioned in the brief facts of the case. The appellant had submitted the following documents with their submissions filed during personal hearing : 1. Disclaimer certificate dated 1-3-2011 from M/s. Aban Offshore Ltd. 2. Expert opinion da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yond period of limitation - Rejection of refund claim on time-bar appears to be as per provisions - Supreme Court in 1993 (67) E.L.T. 3 (S. C.) upheld Delhi High Court ruling that money realized in excess of what is permissible in law is outside the provisions and such money not covered under "duty of excise" - Limitation under Section 11B of Central Excise Act, 1944 not applicable to amount paid which cannot be taken as duty of excise - High Court empowered to entertain refund claim as what was paid was not Service tax - Refund directed - Section 11B ibid as applicable to Service tax vide Section 83 of Finance Act, 1994. [paras 3, 6, 7, 13, 14, 15, 16]. Way back in 2009 as Commissioner (Appeals) Pune-II, I have taken a very similar decision in the case of Amit Spinning Industries Ltd., reported in 2009 (246) E.L.T. 782 (Commr. Appl.) wherein it was held as follows : "Refund - When any amount is not legally payable to Government, it becomes 'pre-deposit' and thus there need not be any elaborate procedure for claiming refund - Appellant has gone out of Central Excise net and not paying any excise duty on his final product and under such circumstances, whatever amount is lying in h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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