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TMI Blog2023 (6) TMI 462X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the services of Works Contract/ EPC for various water supply improvement schemes announced by the Government of Andhra Pradesh. While such services are exempt from Service Tax payment, the client i.e., Executive Engineer, Public Health Division, Tirupati, used to deduct Service Tax component from the bills raised by the Appellant and insisted on the Appellant to pay the same to the Department. The Appellant had submitted to their client that no Service Tax is required to be paid in respect of these projects as the Works Contract activities are being taken up on account of public welfare and no commercial construction activities were being undertaken by them. However, the client has deducted Rs.40,95,717/- and Rs.56,64,889/- under various ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as under: Date of cheque given by the client Date of GAR-7 Challan remittance Amount 05.03.2009 03.04.2009 Rs. 16,56,240/- 31.03.2009 15.04.2009 Rs.17,76,304/- 18.03.2009 31.03.2009 Rs.20,23,237/- 18.03.2009 31.03.2009 Rs.2,09,905/- 5. The refund claims were filed on 31.03.2010. From the above Table, it can be seen that in the first two cases, the refund claims were filed well before the one year period. In the 3rd and 4th case, though the refund claim was filed on 31.03.2010, since the date of limitation, if any, will start from the next date, even in these cases the refund claim has been filed within one year. 6. In respect of the second Appeal for Rs.56,64,889/-, the same was rejected only on account of unjust en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, admittedly, the Department also agrees that these projects are fully exempt from payment of Service Tax. Now coming to the refund claims filed by the Appellant, it is clear that even though no Service Tax was payable the same was paid only on account of the withholding of the same by the client. Therefore, the amount paid by them by way of GAR-7 Challans cannot be considered as Service Tax paid by them. Therefore, when the amount has been paid by mistake (in this case only on the insistence of the client) the same cannot be treated as Service Tax paid. In such cases, Section 11B of Central Excise Act, 1944 will not be applicable as held in the case of CCE, Bangalore vs KVR Construction [2012 (26) STR 195 (Kar.)]. The relevant portion is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rity of law. If we look at the converse, we find mere payment of amount, would not authorize the department to regularise such payment. When once the department had no authority to demand service tax from the respondent because of its circular dated 17-9-2004, the payment made by the respondent company would not partake the character of "service tax" liable to be paid by them. Therefore, mere payment made by the respondent will neither validate the nature of payment nor the nature of transaction. In other words, mere payment of amount would not make it a "service tax" payable by them. When once there is lack of authority to demand "service tax" from the respondent company, the department lacks authority to levy and collect such amount. Ther ..... X X X X Extracts X X X X X X X X Extracts X X X X
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