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TMI Blog2017 (4) TMI 1130X X X X Extracts X X X X X X X X Extracts X X X X ..... 3) TMI 333 - CESTAT, BANGALORE] - The Tribunal in the case of Amadalavalasa Cooperative Sugars Ltd. v. CCE, Visakhapatnam [2007 (1) TMI 432 - CESTAT, BANGALORE] held that unjust enrichment is not applicable as the contract price is inclusive of duty and duty payable reduced or becomes zero is immaterial. The refund should not be denied on the ground of time barred and unjust enrichment - appeal allowed - decided in favor of appellant. - ST/75329, 75396, 75397, 75399 & 75400/16 - Order No. FO/A/75741-75745/2017 - Dated:- 21-3-2017 - Shri P. K. Choudhary, Member ( Judicial ) Shri G. Natarajan, Advocate for the Appellant Shri A. K. Biswas, Supdt.(AR) for the Revenue ORDER Per: Shri P. K. Choudhary The appellant had filed the refund claims in respect of Service Tax paid by them under works contract service for the various works executed by them for the Govt. of West Bengal and its various agencies for laying of pipelines for water supply, sewerage lines etc It is the case of the appellant that they are not liable to pay Service Tax. The refund claims were rejected by the adjudicating authority on the ground of time bar and unjust enrichment and the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... awarded by the Government would contain a clause that the prices quoted and accepted is inclusive of all taxes. He filed sample copies of such work orders. He also categorically stated that no amount was collected by the appellant as Service Tax by indicating the same separately as could be observed from the copies of invoices/RA Bills. This would refer to all those taxes which are payable. If Service Tax is not at all payable for the contract, it cannot be presumed that the contract price is inclusive of Service Tax also. At the relevant point of time since there were widespread confusion as to the applicability of Service Tax on works contract', the appellant by way of abundant caution paid Service Tax by calculating the liability on cum duty basis. Once it is held that the subject activities would not at all be liable to Service Tax, the appellant could not be denied the right to claim refund of the Service Tax paid. In support of his submissions he relied upon the decision of Hon ble High Court of Calcutta in the case of CCE, Calcutta-III v. Panihati Rubber Ltd. [2004 (172) ELT 310 (Cal.) ] and the decisions of the Tribunal in the cases of Amadalavalasa Cooperative Sugar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her held that concerned Court while exercising the jurisdiction under the said articles, will have due regard to the legislative intent manifested by the provisions of the Act and the writ petition would naturally be considered and disposed of in the light of the provisions of Section 11B of the Act. It has been held therein that power under Article 226 has to be exercised to effectuate the regime of law and not for abrogating it, as the power under Article 226 is conceived to serve the ends of law and not to transgress them. At paragraph 113 of the said judgment, they classify the various refund claims into three groups or categories : (a) The levy is unconstitutional-outside the provisions of the (I) Act or not contemplated by the Act. (b) The levy is based on misconstruction or wrong or erroneous (II) Interpretation of the relevant provisions of the Act, Rules or Notifications: or by failure to follow the vital or fundamental provisions of the Act or by acting in violation of the fundamental principles of judicial procedure. (c) Mistake of law - the levy or imposition was (III) unconstitutional or illegal or not exigible in law (without jurisdiction) and, so found ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 - clauses (3) and (4). * * * * * * * * * * * * 23. Now we are faced with a similar situation where the claim of the respondent/assessee is on the ground that they have paid the amount by mistake and therefore they are entitled for the refund of the said amount. If we consider this payment as service tax and duty payable, automatically, Section 11B would be applicable. When once there was no compulsion or duty cast to pay this service tax, the amount of ₹ 1,23,96,948/- paid by petitioner under mistaken notion, would not be a duty or service tax payable in law. Therefore, once it is not payable in law there was no authority for the department to retain such amount. By any stretch of imagination, it will not amount to duty of excise to attract Section 11B. Therefore, it is outside the purview of Section 11B of the Act. 24. The learned Counsel for the appellant has also contended that when the order of refund was rejected, the respondent could have approached this Court instead of filing the appeal choosing a wrong forum, could not be a deficit coming in the way to claim refund. 25 . However, the petitioner has not approached the Tribunal after the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly, no protest was lodged and they have recovered the service tax also from their clients. In the case of Beharay Rathi Constructions (supra), the respondents were the recipient of the Goods Transport Agency service and in that case they have claimed abatement. In the case of Jumax Foam Pvt. Ltd. (supra), the appellants filed the refund claim of the excess Service Tax paid by them. In such a situation, the facts are not similar to this case. In the case of Hexacom (I) Ltd. v. Commissioner of Central Excise, Jaipur - 2006 (3) S.T.R. 131 (Tribunal) = 2003 (156) E.L.T. 357 (Tri.-Del.), this Tribunal has held that if any amounts are collected erroneously as representing service tax, which is not in force, there is no bar to return of such amounts. Further, in the case of CCE, Jaipur-I v. Jai Laxmi Finance Co. - 2006 (3) S.T.R. 25 (Tri.-Del.) , this Tribunal had again held that the amount collected without authority of law, the assessee is eligible for refund. In this case also, prior to 1-5-2006, the provisions of Service Tax were not applicable on the respondents and the amount paid as Service Tax was not payable by them at all. In that situation, the provisions of Section 11B of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... when it was paid and only consequent upon interpretation of law or adjudication, the levy is liable to be ordered as refund. When payment was effected, if it has no colour of legality, Section 11B is not attracted. This Court is also of the view that levy is not in accordance with the provisions of the Service Tax and therefore, such payment cannot be taken as a payment made relatable to Section 11B of the Central Excise Act. 10. In the case of Hexacom (I) Ltd. v. Commissioner of Central Excise, Jaipur [2003 (156) E.L.T. 357 (Tri.-Del.)] , the Tribunal on the identical issue allowed the appeal filed by the assessee. The relevant portion of the said decision is reproduced below:- The issue raised in this appeal relates to refund of amount paid by the appellants by way of service tax on leased circuits. The appellant is a cellular operator who leases circuits from the DOT for the purpose of running the cellular services. In addition to lease charges, the appellants were charged with service tax also by the DOT for the periods 1998-99 and 1999-2000. Subsequently, on revision of lease charges retrospectively, DOT returned the excess amount collected towards lease charges; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t mean that excise duty is covered by it especially when appellant has been taking a stand from the beginning as to non-excisability of goods. It is worthwhile to briefly mention the facts of the case. In the above-mentioned case, the appellant had a contract with M/s. I.O.C. Ltd. for supply of 150 tank wagons; for supply, fabrication and mounting of heating coils inside tank wagons for 'LSHS service'. The contract covered 150 tank wagons. They applied for permission under Rule 173H of Central Excise Rules for bringing duty paid wagons and other duty paid materials for such fabrication job. After obtaining necessary permission from the Department, they executed the work and cleared the tank wagons on payment of duty, as demanded by the Department, under protest. Thereafter they claimed refund. The refund claim was rejected. But the Collector (Appeals) held that the process carried out by the appellants did not amount to manufacture and since the Assistant Commissioner had concluded that the goods are covered by Rule 173H, he should have been allowed clearance without payment of duty. In view of the favourable order, the appellants filed a refund claim for the consequential ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relied on :- (a) Commissioner v. Carona Cosmetics [2000 (118) E.L.T. 356] (b) Swarup Fibre Industries v. Commr. [2000 (120) E.L.T. 510] (c) ITC Bhadrachalam Paperboards Ltd. v. Commr. [2002 (146) E.L.T. 582] 4. Learned JDR relied on the following decisions :- (i) Lakhanpal National Ltd. v. CCE, Vadodara [2006 (195) E.L.T. 69 (Tri - Mum)] (ii) SRF Ltd. v. CC,. Chennai [2006 (193) E.L.T. 186 (Tri - LB)]. 5. We have gone through the records of the case carefully. The issue is simple. The contract of the appellants with the buyer indicates that the price to be paid for the goods is inclusive of duty payable. Suppose the price is ₹ 100/- and if the duty payable is ₹ 20/- the appellants would show in the invoice two figures ₹ 80/- ₹ 20/- to indicate the duty. Even from the beginning, the appellants took the stand that no duty is leviable on the scrap derived from old machinery. Since the department demanded duty, he paid the same and showed it in the invoice. Later, when it was held that the goods are not liable to duty, we cannot say that he passed on duty burden of ₹ 20/- to the buyer. Irrespective of the fact that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ority to retain the said amount and will have to be refunded. 16. It may also be mentioned that in the case of Hind Agro Industries Limited (supra) , we find that the Hon'ble Delhi High Court has circumscribed the above view by prescribing the period of three years , after discovery of the mistake, for claiming such refund. 17. Thus, we are of the view that in the instant case, the amount deposited by the assessee-Appellants without any authority of law cannot be considered as Service Tax. As per Article 265 of the Constitution, no tax can be collected without any authority of law. At the relevant time, there was no authority of law to collect Service Tax on the activity carried out by the assessee-Appellants. Hence, Section 11B of the Central Excise Act, 1944 is not applicable. The amount was deposited in the year 2006-07 and the refund was filed on 02nd January, 2008. Hence, the claim has been made within the period of three years prescribed by Hon ble Delhi High Court. Therefore, we are of the view that the assessee-Appellants are entitled to get the refund and the same is not hit by the limitation prescribed under Section 11B of the Central Excise Act, 1944 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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