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TMI Blog2017 (9) TMI 1324X X X X Extracts X X X X X X X X Extracts X X X X ..... ts identity of Service Tax and cannot be rejected as barred by limitation. Hence, the appellant is entitled to refund of the amount as claimed by them and the impugned orders cannot be sustained. Appeal allowed - decided in favor of appellant. X X X X Extracts X X X X X X X X Extracts X X X X ..... he limitation under section 11B would apply. I find that this issue has been discussed by the various judicial authorities, some of them are required to be mentioned as under:- (i) In the case of Geojit BNP Paribas Financial Services Ltd. Vs. CCE, Customs & Service Tax, Kochi [2015 (39) STR 706 (Ker), the Hon'ble Kerala High Court after considering the decision of the Hon'ble Supreme Court in the case of Mafatlal Industries Ltd. (supra) observed that when payment was effected, if it has no colour of legality, section 11B is not attracted. In that case, the assessee made an application for refund of Service Tax for the reason that they need not pay the same. The said application was rejected as it was filed beyond one year from the relevant date. For the proper appreciation of the case, the relevant portion of the said case is reproduced below: 7. Coming to Section 11B, before it was amended by Act 40 of 1991, it read as follows (again omitting portions not necessary for the present purposes) : "11B. Claim for refund of duty. Any person (1) claiming refund of any duty of excise may make an application for refund of such duty to the Assistant Collector of Central Excise before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pra) after considering the decision of the Hon'ble Supreme Court observed that if what was paid cannot be taken as duty of excise, the bar of limitation under section 11B , cannot be applied. In that case the petitioner paid the Service Tax. But after realising that the services rendered for the construction of the building in Sri Lanka would not attract Service Tax, they filed refund claim which was rejected as barred by limitation under section 11B of the Act, 1944. The relevant portion said decision is reproduced below: 10. I have carefully considered the rival submissions. Sub-section (1) of Section 11B deals only with a claim for refund of any duty of excise. But unfortunately, the word duty is not defined under the Act. In Chhotabhai Jethabhai Patel and Co. v. Union of India [1999 (110) E.L.T. 118 (S.C.) = AIR 1962 SC 1006], a Constitution Bench of the Supreme Court pointed out with reference to Entry 84 of List I of Schedule VII of the Constitution that a duty of excise is a tax-levy on home produced goods of a specified class or description, the duty being calculated according to the quantity or value of the goods and which is levied because of the mere fact of the goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntertain the application. 12. Though the above views were expressed in the context of a claim for refund arising out of a levy being declared unconstitutional, the views were based upon the theory of unjust enrichment and the principles incorporated in section 72 of the Contract Act. 13. In Union of India v. ITC Ltd [1993 (67) E.L.T. 3 (S.C.) = 1993 Supp. (4) SCC 326], the Supreme Court upheld the view taken by the Division Bench of the Delhi High Court with regard to the question of limitation. On the question of limitation, the Division Bench of the Delhi High Court had observed that the duty of excise is that which is levied in accordance with law and that any money which is realised in excess of what is permissible in law would be a realisation made outside the provisions of the Act. 14. Therefore, it is clear that if what was paid cannot be taken to be duty of excise, the bar of limitation under section 11B(1) cannot be applied. This is on account of the fact that the bar of limitation prescribed under Section 11B(1) applies only to any person claiming refund of any duty of excise and interest. Therefore, I am of the considered view that the claim of the petitioner for refu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the educational, religious, charitable, health, sanitation or philanthropic purposes and not for the purpose of profit, are not taxable being non-commercial in nature. It is also not in dispute that claim of the respondent before the concerned authority seeking refund of the above said amount was based on the above circular dated 17-9-2004 on the ground that the services are rendered for a non-profit organization. The department is also not denying that services rendered by the respondent by putting up constructions of several buildings stated above to the trust, which is a non-profit organization, hence, a non-profit service is not taxable. 13. According to the petitioner, above said amounts were paid under a mistaken impression that they were liable to pay such service tax and the amount of refund claimed by them was not charged by them and collected from the person to whom they rendered service. In other words, according to them, they have paid above said amounts under a mistaken notion that they were liable to pay even though they are not liable to pay by virtue of circular dated 17-9-2004 and accordingly sought for refund of the said amount. 14. While adjudicating the refun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication filed under Section 11B of the Central Excise Act and whether Sec. 11 applies to the facts of the present case at all. In the case of Mafatlal Industries Ltd. v. Union of India (supra), the question was with regard to the refund of Central Excise and Customs Duties. It was held that all claims except where levy is held to be unconstitutional, is to be preferred and adjudicated upon under Section 11B of the Central Excise Act, 1944 or under Section 27 of the Customs Act, 1962 and subject to claimant establishing that burden of duty has not been passed on to a third party. In such circumstances, it was held, no civil suit for refund of duty is maintainable. It also observes that writ jurisdiction of High Courts under Article 226 and of Supreme Court under Article 32 remains unaffected by the provisions of Section 11B of the Act. It was further 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 unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... td. v. Union of India & Ors. [1994 Supp (3) SCC 86] Rule 11 before and after amendment, or Section 11B cannot affect Section 72 of the Contract Act or the provisions of Limitation Act in such situations. My answer to the claims for refund broadly falling under the three groups of categories enumerated in paragraph 6 of this judgment is as follows : Where the levy is unconstitutional - outside the category (I) provisions of the Act or not contemplated by the Act - In such cases, the jurisdiction of the civil courts is not barred. The aggrieved party can invoke Section 72 of the Contract Act, file a suit or a petition under Article 226 of the Constitution and pray for appropriate relief inclusive of refund within the period of limitation provided by the appropriate law. (Dulabhais case (supra) - para 32 - clauses (3) and (4). (v) The Tribunal in the case of M/s. Monnet International Ltd. (supra) in the identical situation held that it is not a case of refund of tax, but return of deposit, for which limitation under Section 11B is not applicable. The relevant portion of the said decision is reproduced below: 11. Thus, in the instant case also, the assessee-Appellants were not s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out 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 Central Excise Act, 1944 extended to the Service Tax are not applicable to this case. Hence, the bar of limitation is not applicable to this case. [Emphasis supplied] 14. After considering the various case laws on the subject which are discussed in the above paragraphs, we come to the conclusion that Section 11B generally governs the claim for refund of duty and interest paid on such duty. The Section has been made applicable for service tax also. In the case of KVR Constructions (supra), the Hon'ble Kerala High Court has laid down yardsticks to decide those cases where Section 11B may not be applicable in service tax cases. The Hon'ble High Court has held that, if there is no authority to collect service tax by the department, it would not give them the authority to retain the amount paid which was initially not payable by them. 15. In the present case, the assessee-Appellants were renderi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 32/2004. Their refund claim was rejected on the ground of limitation and unjust enrichment . The finding of the Tribunal are as under: 8. I have considered the submission made by both the sides and perused the record. The rejection of refund claim by ld. Commissioner on account of unjust enrichment, the order of review is not sustainable in the eyes of law as held by Hon'ble High Court of Rajasthan in the case of Inani Carriers (supra), wherein the Hon'ble High Court has held that the superior jurisdiction was capable of reversing, modifying or affirming the order which was not issued before it and in the present case ld. Commissioner (A) has declined to modify or simply affirm the order. Further, in the case of Shiva Builders (supra), the Hon'ble High Court has framed following issue whether the Commissioner can pass order in revision under Section 84 of the Finance Act, 1994 when the issue of the appeal decided by the Commissioner (A) is entirely a different issue. In that case the Hon'ble High Court has answered as under : Exercise of jurisdiction under section 84(4) of the Finance Act when appeal has been preferred non-permissible. 9. Therefore, I hold that the order pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of both the sides. 8. In this case the appellant was not a liable to pay service tax at all. Therefore, the amount paid by the appellant towards service tax is not service tax, consequently, the provisions of Section 11B of the Act are not applicable as held by this Tribunal in the case of M/s. Gulshan Chemicals Private Limited (Supra). In these circumstances, the bar of limitation is not applicable to the facts of this case. Consequently, the order of rejection of refund claim on the ground of limitation is set-aside. Accordingly, it is held that appellant is entitled for refund claim." 8. The ld.A.R. submitted that every refund arising within the statute has to be claimed in accordance with Section 11B of the Act as settled by the Hon'ble Supreme Court in the case of Mafatlal Indus.(supra). I find that the Hon'ble Supreme Court in the case of Mafatlal Industries (supra) held that any and every claim for refund of excise duty can be made only under and in accordance with Rule 11 or section 11B as the case may be. The Hon'ble High Courts in various decisions, some of them have been referred above, observed that if the amount is not duty or tax at all, the provisions of section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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