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TMI Blog2023 (5) TMI 975X X X X Extracts X X X X X X X X Extracts X X X X ..... Excise Act refers to a claim for refund of duty of excise only and does not refer to any other amount collected without authority of law. Thus, it was held that section 11-B of the Excise Act would not be applicable. The Supreme Court, on 11 July, 2011, dismissed the Special Leave Petition filed by the Department to assail the aforesaid judgment of the Karnataka High Court. There is no merit in this appeal filed by the Department - Appeal dismissed. - SERVICE TAX APPEAL NO. 52772 OF 2016 - FINAL ORDER NO.50697/2023 - Dated:- 16-5-2023 - MR. DILIP GUPTA, PRESIDENT AND MR. P. ANJANI KUMAR, MEMBER (TECHNICAL) Shri Prashant Kumar Sinha, Authorised Representative of the Appellant Shri Siddharth Srivastava, Advocate, for the Respondent ORDER The Department has filed this appeal for setting aside the order dated March 21, 2016 passed by the Commissioner (Appeals-I), Service Tax, New Delhi [Commissioner (Appeals)]. 2. The respondent, M/s Afflatun International had filed the appeal before the Commissioner (Appeals) to assail the order dated December 10, 2015 passed by the Assistant Commissioner of Service Tax rejecting the refund claim of Rs. 1,55,13,061/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted. The Commissioner (Appeals) accepted this contention of the respondent and held that as the respondent was not a body corporate‟, it was not required to pay service tax. The Commissioner (Appeals) also found that as the activities undertaken by the contractor in the premises of the respondent were for cutting, fabrication stitching, finishing, thread cutting, pressing and packing, they would amount to manufacture of production of goods and, therefore, service tax would not be leviable. 7. Shri Prashant Kumar Sinha, the learned authorized representative appearing for the Department contended that the Commissioner (Appeals) placed emphasis on the second agreement dated May 31, 2014 executed between the respondent and the contractor to arrive at a conclusion that the job work was performed by the contractor and he had not supplied manpower, but the Commissioner (Appeals) failed to correctly appreciate the agreement dated June 01, 2013, which agreement would make it evident that the contractor had supplied manpower to the respondent. 8. This submission of learned authorized representative appearing for the Department cannot be accepted. A reading of both the agreemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 17 September, 2004 and, accordingly, a refund was sought. The Karnataka High Court examined whether section 11-B of the Excise Act would be applicable if the amount was paid under a mistaken impression that it was liable to be paid. The High Court found that section 11- B of the Excise Act refers to a claim for refund of duty of excise only and does not refer to any other amount collected without authority of law. Thus, it was held that section 11-B of the Excise Act would not be applicable. The relevant observations are as follows : 18 . From the reading of the above Section, it refers to claim for refund of duty of excise only, it does not refer to any other amounts collected without authority of law. In the case on hand, admittedly, the amount sought for as refund was the amount paid under mistaken notion which even according to the department was not liable to be paid. 19. According to the appellant, the very fact that said amounts are paid as service tax under Finance Act, 1994 and also filing of an application in Form-R of the Central Excise Act would indicate that the applicant was intending to claim refund of the duty with reference to Section 11B, theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 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 Rs. 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 . [emphasis supplied] 16. The Supreme Court, on 11 July, 2011, dismissed the Special Leave Petition filed by the Department to assail the aforesaid judgment of the Karnataka High Court. 17. The same view was taken by the Madras High Court in M/s 3E Infotech vs Customs, Excise Service Tax Appellate Tribunal Anr . [2018-TIOL-1268-HC-MAD-ST]. It was observed that : 13. On an analysis of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taken as payment made relatable to section 11-B of the Excise Act and, therefore, refund has to be allowed. The observations are as follows : 8 . The learned counsel for the Department, relying on the judgment of the Hon‟ble Supreme Court in Mafatlal Industries Ltd. and Others v. Union of India and Others [(1997) 5 SCC 536 = 1997 (89) E.L.T. 247 (S.C.)] would argue that even if the payment was made under a mistake, the refund can only be processed in terms of Section 11B of the Central Excise Act. In the above case, the Apex Court elaborately classified claim for refund into three groups or categories, vis- -vis, (i) unconstitutional levy, (ii) illegal levy, and (iii) mistake of law, and held that the remedies involved in all the three categories are the remedies provided under the Excise and Customs Act. None of the above categories would attract to the case in hand. In this case, the levy was purely on account of mistake of fact in understanding the law. The petitioner assumed that the transaction for which he has paid tax, is covered under the law. The law does not cover such transaction for payment of Service Tax. Therefore, it is not on account of any mistake of l ..... X X X X Extracts X X X X X X X X Extracts X X X X
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