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TMI Blog2023 (7) TMI 1123X X X X Extracts X X X X X X X X Extracts X X X X ..... ise Act, 1944 read with Section 83 of the Finance Act, 1994. Reliance placed on the judgment of Allahabad High Court in the case of EBIZ. COM PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX AND ORS. [ 2016 (9) TMI 1405 - ALLAHABAD HIGH COURT] where it was held that The consensus of the authorities of various High Courts as well as Supreme Court is that any amount received by Revenue, as deposit or pre-deposit i.e. unauthorizedly or under mistaken notion, etc., cannot be retained by Revenue since it has no authority in law to retain such amount and it must be refunded with interest Principles of unjust enrichment - HELD THAT:- The amount of Rs. 2.37 Crores deposited by the assessee with the revenue, they could not have been passed by respondent assessee to its customers. Firstly as the charges of telephone/mobile phones which are charged by BSNL from its customers cannot be changed on the discretionary basis, at the same time the department has not established that the respondent assessee have issued any supplementary invoices of the above mentioned amount to their customers - since the rate of the BSNL for telephone/mobile phone are pre-determin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its Final Order No. A/2629/WZB/AHD/08 dated 01.12.2008 set aside the above order in appeal and thus the demand of service tax amounting to Rs. 3.36 Crores was also set aside and it was ordered that appellant will be entitled for the consequential relief. 3. The original sanctioning authority namely Assistant Commissioner Service Tax, Ahmedabad, sanctioned the refund of the deposited amount done by the respondent assessee viz. BSNL vide its order dated 08.09.2010. The department feeling aggrieved with the Assistant Commissioner s order made an appeal before the Commissioner (Appeals) who vide its order No. V2(ST)RA/02/A-IV/2011 dated 24.05.2010 rejected the department appeal, observing the following:- In the grounds of appeal, the appellant contended that the adjudicating authority came to the conclusion that unjust enrichment is not applicable without verifying the corresponding invoices. In this record I find that the respondents have not raised any supplementary Invoice to all the customers to collect this amount paid subsequently. During the nearing the respondents produced some sample copies of Invoices raised subsequent to the period of payment which does not indicate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ores deposited by the Respondent assessee M/s. BSNL before issuing the show cause notice towards the alleged short payment of the service tax which was also considered as pre-deposit at the time of admission of the appeal by this Tribunal. (ii) Whether the principle of unjust enrichment are present in this particular matter or not. 5.1 It is a matter of record that M/s. BSNL deposited Rs. 2.37 crores with the Revenue during the course of inquiry for the alleged short payment of service tax. Subsequently, the matter got adjudicated and finally this Tribunal has decided that there is no short payment of service tax on the part of the respondent assessee and therefore as of today there is no demand against the respondent assesse with regard to the alleged two show cause notices which was subject matter of litigation in this regard. The amount which was deposited has also been taken as pre-deposit at the time of the admission of the appeal of the Respondent and it is a settled principle of law now that deposit taken during the course of investigation or as a pre-deposit at the time of the admission of the appeal will not be hit by the provision of the Section 11 B of Central Exci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not a case of refund of duty. It is a pre-deposit made under protest at the time of investigation, as has been recorded in original proceedings itself. Court has said as under :- There are also very many judgments of various Courts, which have also reiterated the same principles that in case any amount is deposited during the pendency of adjudication proceedings or investigation, the said amount would be in the nature of deposit under protest and, therefore, the principles of unjust enrichment would not apply. In view of the catena of decisions, available on this issue, this Court answers the first substantial question of law against the Revenue and in favour of the assessee. 23. It has been consistent view [of] various Courts that any amount, deposited during pendency of adjudication proceedings or investigation is in the nature of deposit made under protest or pre-deposit and, therefore, principles of unjust enrichment would not be attracted. 24. Madras High Court in Commissioner of Central Excise v. Pricol Ltd. (supra) relied on a Bombay High Court s judgment in Suvidhe Ltd. v. Union of India - 1996 (82) E.L.T. 177 (Bom.); Gujarat High Court s judgments in Commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concerned Assistant/Deputy Commissioner of Central Excise or Customs, as the case may be, will suffice for the purpose. All pending refund applications already made under the relevant provisions of the Indirect Tax enactments for return of such deposits and which are pending with the authorities will also be treated as simple letters asking for return of the deposits, and will be processed as such. Similarly, bank guarantees executed in lieu of cash deposits shall also be returned. 27. Circular dated 2-1-2002 has been modified by subsequent Circular dated 20-6-2003 to the following effect :- It has been brought to the notice of the Board that the wordings in para 4 of the Circular, namely, any deviation and resultant liability to interest on delayed refunds shall be viewed strictly convey the impression that interest is liable to be granted for refund of pre-deposits even when there is no corresponding provision in the Central Excise Act, 1944. The mater has been examined and the sentence is re-worded as under :- Any deviation from the procedure explained hereinabove shall be viewed strictly. 28. There is one more Circular No. 802/35/2004-CX, dated 8-12-2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest, the same shall not be payable. Court in Paras 5.4 and 6 said as under :- The 5.4 contention to the effect that no interest is payable because there is no provision of interest under the scheme of the Act is also thoroughly misconceived and misplaced. When the Department acts illegally and not as per the scheme of the Act, the interest on such refund can never be provided for under the Scheme of the Act. If the authorities act as per the law, the question of granting interest on refund can be appreciated and considered as per the scheme of the Act. 6. Learned Senior Advocate for the petitioner cited various judgments in support of his contention that even in absence of any statutory provision, interest on refund is automatic and has to be granted on commercial principles. The Court finds force in the contentions of the learned Senior Advocate for the petitioner. The learned counsel has placed reliance on the decision of the Hon ble Supreme Court in the case of Sandvik Asia Ltd. v. Commissioner of Income-tax, Pune (supra), wherein the Hon ble Apex Court even while finding that there was no statutory provision to pay interest on delayed payment of interest, held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of amount, would not authorize the department to regularize 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 levey and collect such amount. Therefore, it would go beyond their purview to collect such amount. When once there is lack of authority to collect such service tax by the appellant, it would not give them the authority to retain the amount paid by the petitioner, which was initially not payable by them. Therefore, mere nomenclature will not be an embargo on the right of the petitioner to demand refund of payment made by them under mistaken notion. 35. The consensus of the authorities of various High Courts as well as Supreme Court is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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