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TMI Blog2022 (6) TMI 138X X X X Extracts X X X X X X X X Extracts X X X X ..... (Audit-II), Mumbai. Tax is levied on the taxable event or, as in the case of service tax , on activity and not on persons; unlike the erroneous enunciation by the first appellate authority, the exemption, likewise, is on the service and not the provider of service , who is, effectively, an agent of the tax administration for collection of tax from the recipient of service along with the contracted payment. The tax paid by the appellant to the provider of service should not, owing to the exemption, have been charged in the invoice. In such circumstances, retention thereof in the face of claim for it is, unless in accordance with procedure laid down in law, repugnant to constitutional authority for levy and collection of tax. Indeed, the refund mechanism of section 11B of Central Excise Act, 1944, as made applicable to Finance Act, 1994, is not restricted to assessee, or person liable to pay tax , but also is within the right of any person. The impugned order has erred in concluding otherwise on right to claim refund and in attributing the intent of the exemption to deployment of service of the provider of service for itself. The essence of service , at least as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imitation of time as well as the lack of correlation between tax claimed to have been paid and the refund sought on which the original authority had fashioned its decision, had side-stepped the patent error therein demonstrated in their submissions, and that, instead, closed proceedings by insinuating the threshold bar of locus standii of the applicant. According to the appellant, notice of such intent had not been served on him and contends that the impugned order is replete with incorrect surmises. 2. Recounting the facts leading to the dispute, Learned Counsel for the appellant submits that, upon realizing that the activities undertaken by persons engaged by him for construction of his own dwelling were not taxable service in accordance with serial no. 14 of notification no. 25/2012-ST dated 20th June 2012, refund of tax charged in five invoices of M/s Gandhi Associates Co between 20th February 2014 and 22nd December 2014 was claimed. Learned Counsel further informed that the tax paid in invoices of eight other persons similarly engaged by the appellant had been refunded by the competent authority without any cavil from the reviewing authority. It was contended by him th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. He contended that the first appellate authority preferred to find justification for dismissal of the claim for refund at the threshold by discrediting the locus of the applicant at this advanced stage and by erroneous interpretation of the intended beneficiary of the specific exemption accorded to 14. Services by way of construction, erection, commissioning or installation of original works pertaining to,- .. (b) a single residential unit otherwise than as part of a residential complex. in notification no. 25/2012-ST dated 20th June 2012 (popularly denominated as the mega exemption notification) after the introduction of negative list regime of tax on services. 4. As far as the bar of limitation of time is concerned, which may, at best, impact only one invoice of 20th February 2014 in which tax of ₹ 1,73,725 was included, he relied upon the decision of the Hon ble High Court of Bombay in Parijat Construction v. Commissioner of Central Excise [2017 (10) TMI 659 (Bom)] to contend that tax collected without authority law cannot be retained in the Consolidated Fund of India by recourse to the relevant date and closure of the statutory window f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant, from tax. It only surprises that the first appellate authority appears to be oblivious to this distinction and also seemed equally oblivious to procedural inappropriateness of determination of an aspect that was not before him in appeal. It would appear that the jeopardizing of the rejection order of the original authority by the submissions of the appellant therein on the error in invoking the bar of limitation of time and in the finding of lack of evidence of tax having been paid that prompted the first appellate authority to attempt another tack for negating the claim for refund. 8. The appellant was charged to tax on services procured from providers for the construction of eligible residential unit that was exempted from the levy by notification even though the providers could have claimed immunity from the obligation otherwise devolving on person liable to pay tax ; it is one of the incongruities of indirect tax that incentive to claim such end-use exemption is not compelling enough for assessees to enable the relief intended by law. Unfortunately too, the travails of pursuing claim for refund and near certainty of recourse to appellate remedy is disi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther side in a dispute resolved by a lower authority. The argument of Learned Authorized Representative in support of the insinuation by the first appellate authority of a fresh ground for denial of refund claim and the enunciation of a further objection now lends this proceedings the appearance of a snowball gathering more reasons for denial at each turn. This was not a disqualification adjudicated upon by the original authority or considered, even extraneously as locus standii was, by the first appellate authority. 11. The decision of the Hon ble Supreme Court was rendered in appeals arising from allowing of refund claims preferred by assessees, i.e. persons liable to pay tax and, more particularly, in the context of gradual drift to self-assessment procedure prompted by acceptance of submission of appellants that earlier decisions of the Hon ble Supreme Court in Collector of Central Excise, Kanpur v. Flock (India) Pvt Ltd [2000 (120) ELT 285 (SC)], in so far as refund of duties of central excise is concerned, and in Priya Blue Industries Ltd v. Commissioner of Customs (Preventive) [2004 (172) ELT 145 (SC)], pertaining to refund of duties of customs, according primacy t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Escorts (supra). 13. The context of the issue decided upon in the cited judgement does not lend itself to universal application for determination of threshold impediment for recourse to section 11 B of Central Excise Act, 1944; the issue was that of continued applicability of earlier decisions pertaining to pre- self-assessment phase to the extant procedure of assessment and the applicability was reiterated by reference to the decision in re Escorts Ltd as continuing to govern applications for refund even after amendments to section 17 of Customs Act, 1962. The judgement relies upon the definition of assessment in section 2 of Customs Act, 1962 and amenability of section 128 of Customs Act, 1962 for appeal by assessee or Revenue against any order including a self-assessed one. 14. In the circumstances of that specific ruling on amenability to appeal, by assessee or Revenue, arising from a grievance in self- assessment , the scope for such recourse by the second of the two, viz., one who bore the burden of duty, enabled by section 11 B of Central Excise Act, 1944 to claim refund was not before the Hon ble Supreme Court in re ITC Ltd. The Hon ble Supreme Court has con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... All that remains is to consider the two reasons adduced by the original authority for denial of refund and which, though disputed before the first appellate authority, was placed on the back burner in the impugned order while the denial was hardened on the flame of locus standii. The only material evidence that could, conceivably, have been offered and solicited, is proof of tax having been paid by the appellant, as recipient of service , and of the tax having been deposited. The appellant has furnished certificate issued by a chartered accountant, the tax challans and the disclaimer from the provider of service who had deposited the tax in the account of the Central Government; it was for the tax authorities to discredit this evidence and, not having done so, the documentation furnished is acceptable proof of tax having been collected and of tax having been credited in the Consolidated Fund of India. In the light of the exemption to which appellant is entitled, this suffices for sanction of refund except where bar of limitation of time intrudes or the claimant would be unjustly enriched. The latter, as recipient of service and ultimate consumer, cannot be. 18. The relev ..... X X X X Extracts X X X X X X X X Extracts X X X X
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