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TMI Blog2023 (12) TMI 1216X X X X Extracts X X X X X X X X Extracts X X X X ..... to another and without a perceived service money contribution cannot be held to be a consideration which is liable to tax. The authority concerned is duty bound to refund such amount as retention of such amount would be in violation of Article 265 of the Constitution of India which mandates that no tax shall be levied or collected except by authority of law. Since Service Tax received by the concerned authority is not backed by any authority of law, in view of the provisions of Article 265 of the Constitution of India, the authority concerned has no right to retain the same. The judgment of MAFATLAL INDUSTRIES LTD. VERSUS UNION OF INDIA [ 1996 (12) TMI 50 - SUPREME COURT] has been considered and interpreted by several judgments including the Karnataka High Court in COMMISSIONER OF CENTRAL EXCISE (APPEALS), BANGALORE VERSUS KVR CONSTRUCTION [ 2012 (7) TMI 22 - KARNATAKA HIGH COURT] , by this Tribunal in the case of M/S. ASL BUILDERS PRIVATE LIMITED VERSUS COMMISSIONER OF CENTRAL GST CX, JAMSHEDPUR [ 2020 (1) TMI 431 - CESTAT KOLKATA] . The said judgments have concluded that statutory limitation periods are not applicable to amounts paid under mistake of law. Thus, it is con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... partment issued Show Cause Notice F.No. V/CGST/NM/Dn-I/R- I/Refund/amit/74/19-20 dated 11.12.2019 proposing rejection of the refund claim on the ground of limitation as prescribed under Section 11 B of Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994. The Show cause notice also proposed that the Refund Claim was not filed in the prescribed Form-R as required under the provisions of Section 11 B of Central Excise Act 1944 read with Section 83 of the Finance Act 1994 under the wrong impression that the Appellant was claiming the Refund of Service tax whereas the Appellant had claimed refund of the amount paid mistakenly. 5. The Appellant replied to the said notice vide submissions dated 24.12.2019 wherein they have stated that as regards the Limitation aspect, the first opportunity to file the refund claim had arisen only after July 2019 as the matter continued to be under investigation and only when the Anti-evasion team closed the investigation the refund claim could be filed. The Appellant mentioned in the submissions that non-filing of claim in the prescribed form is a curable defect and the Appellant filed the prescribed form together with the said wri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax and Excise Duty which is refundable on various grounds. However, any amount which is neither appropriated nor confirmed as a Service Tax is merely a deposit and therefore, the provisions of Section 11B cannot be applied to decide such refund claims for refund of deposited amount for the reason that such deposit cannot be withheld by the revenue without the authority of law. In support of his submissions, reliance was placed on the following judgements: a) Way2wealth Brokers Pvt. Ltd. vs. Commissioner of C. T., Bengaluru [2022 (61) G.S.T.L. 349 (Kar)] b) Commr. of C.EX (Appeals), Bangalore v/s KVR Construction [2012 (26) S.T.R. 195 (Kar)] c) Vyankatesh Real Estate Developers v/s CCE, Nagpur [2014 (35) STR 589 (Tri.-Mumbai)] d) Bhavnagar v/s Madhavi Procon Pvt. Ltd. 2015 (38) STR 74 (Tri. Ahmd.) e) Kodak India Ltd vs Commissioner of customs, C.EX, Indore (MP) [2012 (282) E.L.T 478 (Tri.-Del)] f) Order passed by Principal bench in case of Excise Appeal No. 53677 of 2018. [Sun Pharmaceutical Industries Ltd V/s Commissioner of Central Excise, Customs] g) Order passed by Principal bench in Service Tax Appeal No. 51524 of 2022-SM [M/s B.L Goel company V/s CCE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the provisions of Article 265 of the Constitution of India, the authority concerned has no right to retain the same. 11. Both sides have relied on a plethora of judgments on the issue of the applicability of the limitation provided under Section 11B to amounts paid under mistake of law. The tenor of the jurisprudence on the subject indicates that the limitation prescribed under Section 11B is not applicable to a refund claim in a situation where the concerned tax was never payable by the assessee. In other words, had the Department raised a demand of such an amount, the assessee could have successfully challenged the constitutionality of the same. 12. This principle was laid down by the Hon'ble Karnataka High Court in CCE Bangalore vs. KVR Constructions [2012 (26) S.T.R. 195 (Kar.)], the relevant portions of which have been extracted below:- 17. If this Court ultimately concludes that Section 11B of the Act is applicable to the facts of the present case, then, the argument of the learned Counsel for the appellant that Writ Petition was not maintainable would merit consideration. Therefore, at this stage, we will not consider the matter regarding maintainability o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such tax because of the nature of the institution for which they have made construction and rendered services. In other words, if the respondent had not paid those amounts, the authority could not have demanded the petitioner to make such payment. In other words, authority lacked authority to levy and collect such service tax. In case, the department were to demand such payments, petitioner could have challenged it as unconstitutional and without authority 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 amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recovered by the Revenue and therefore, such amount cannot now be retained by the Revenue. 17. I find that the refund claim filed by the Appellant was filed within the limitation period prescribed under the Article 113 of the Limitation Act, 1963 and since, the amount was not payable by the Appellant under the provisions of the Finance Act, 1994 or the Central Excise Act, 1944, the provisions under the Limitation Act, 1963 would apply. 14. Further, the Hon ble Bombay High Court, Hon ble Calcutta High Court, Hon ble Madras High Court, Hon ble Telangana High Court have similarly held that refunds of amounts paid under mistake of law would not be hit by the statutory limitation periods, in the following judgments:- i. Parijat Construction vs. CCE, Nashik [2018 (9) G.S.T.L. 8 (Bom.)] 5. We are of the view that the issue as to whether limitation prescribed under Section 11B of the said Act applies to a refund claimed in respect of service tax paid under a mistake of law is no longer res integra. The two decisions of the Division Bench of this Court in Hindustan Cocoa (supra) and Commissioner of Central Excise, Nagpur v. M/s. SGR Infratech Ltd. (supra) are square ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contrary to the law laid down by the Hon'ble Apex Court, and therefore we have no hesitation in holding that the claim of the Assessee for a sum of Rs. 4,39,683/- cannot be barred by limitation, and ought to be refunded. 14. There is no doubt in our minds, that if the Revenue is allowed to keep the excess service tax paid, it would not be proper, and against the tenets of Article 265 of the Constitution of India. On the facts and circumstances of this case, we deem it appropriate to pass the following directions :- (a) The Application under Section 11B cannot be rejected on the ground that is barred by limitation, provided for under Section. iii. Vasudha Bomireddy vs. Assistant Commissioner of Service Tax [2020 (35) GSTL 52 (Telangana)] 18. Having regard to these decisions, we are of the opinion that if the petitioners were not liable to pay 'service tax' on the transaction of the purchase of the constructed area along with goods apart from undivided share of land at all, the payment which was made by the petitioners would not be a payment of service tax at all; that the department also could not have demanded payment of the same from the petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Construction supra, by this Tribunal in the case of ASL Builders supra, by CESTAT Delhi in Credible Engineering supra. The said judgments have concluded that statutory limitation periods are not applicable to amounts paid under mistake of law. 16. I also find that the Nagpur Bench of the Hon ble Bombay High Court in the case of CCE, Nagpur vs. SGR Infotech Ltd. (earlier known as Vibrant Infotech Ltd.) Nagpur and anr. In Central Excise Appeal No.26 of 2014 vide judgment dated 28.10.2015 held thus:- 2. The appellant by placing reliance upon Section 11B of Central Excise Act, 1944 submits that claim for refund ought to have been moved within one year and here, in any case, as assessee has passed on burden to the employer, namely, Nagpur Municipal Corporation, the application for refund is misconceived. Support is being taken from the judgment of the Apex Court in the case of Mafatlal Industries Ltd. and ors. Vs. Union of India and ors. reported at (1997) 5 SCC 536. It is pointed out that the claim by assessee for refund can be viewed as a claim which falls under second category as described in paragraph no. 27 of the said judgment and limitation of one year must apply. Here, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and its observations are also looked into by the Division Bench of the High Court of Delhi in the case of Hind Agro Industries Limited Vs. Commissioner of Customs reported at 2008(221) E.L.T. 336(Del.) in paragraph no. 11. 8. We therefore find the contention that the application should be moved within one year is erroneous and in any case, no substantial question of law arises in that respect. 17. Finally, in the case of Credible Engineering Construction Projects Ltd. vs. Commissioner of Central Tax Hyderabad GST Service Tax Appeal No. 30781 of 2018 Order dated 25.09.2020 there was a dissent between the members and the matter was referred to a Third Member. Relevant portions of the order are extracted below: - (1) Whether the limitation prescribed under Section 11B of the Central Excise Act will not be applicable as the tax was paid erroneously though eligible to exemption and as such is in the nature of deposit and hence limitation is not attracted as held by Member (Judicial) following the ruling of Hon'ble Karnataka High Court in KVR Construction affirmed by Hon'ble Supreme Court 2018(14) STR 117 . OR Limitation prescribed under Section 11B is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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