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TMI Blog2024 (10) TMI 218X X X X Extracts X X X X X X X X Extracts X X X X ..... stification for the amounts deposited being retained. It was further held in those decisions that consequently the period of limitation as otherwise raised in terms of Section 11B of the Act would be inapplicable. There are no justification to take a contrary view. The appeal consequently fails and shall stand dismissed. - HON'BLE MR. JUSTICE YASHWANT VARMA AND HON'BLE MR. JUSTICE RAVINDER DUDEJA For the Appellant Through: Mr. Aditya Singla, SSC with Mr. Sarthak Mittal Mr. Raghav Bakshi, Advs. For the Respondent Through: Mr. Siddharth Srivastava, Adv. ORDER PER 1. The Commissioner of Customs seeks to question the judgment rendered by the Customs, Excise and Service Tax Appellate Tribunal [CESTAT] dated 16 May 2023 and has proposed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lating to limitation would not be applicable in case where payment was made purely on account of a mistake in understanding the Notification. 15. In Commissioner of Central Excise (Appeals), Bangalore vs KVR Construction, service tax was paid by the assessee under a mistaken notion that it was liable to pay, though it was not liable to pay by virtue of a Circular 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 amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there was exemption to pay 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 p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the department to retain such amount. By any stretch of imagination, it will not amount to duty of excise to attract Section l1B. 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.. It was observed that: 13. On an analysis of the precedents cited above, we are of the opinion, that when service tax is paid by mistake a claim for refund cannot be barred by limitation, merely because the period of limitation under Section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id a Service Tax on Commercial or Industrial Construction Service even though such service is not leviable to service tax. We are of the view that the decisions relied upon by the Appellate Tribunal do not support the case of the respondent in rejecting the refund claim on the ground that it was barred by limitation. We are, therefore, of the view that the impugned order is unsustainable. [emphasis supplied] 19. The Kerala High Court in Geojit BNP Paribas Financial Services Ltd. vs CCE, Cus ST, Kochi also held that when levy is not in accordance with the provisions of the Act, such payment cannot be 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 11B is not attracted. This Court is also of the view that levy is not in accordance with the provisions of the Service Tax and therefore, such payment cannot be taken as a payment made relatable to Section 11B of the Central Excise Act. [emphasis supplied] 20. In G.B. Engineers vs Union of India, the Jharkhand High Court observed that when the amount is not paid under the provisions of the Excise Act or the Finance Act, then if the amount is paid under a mistake, the same cannot be retained by the Government and the provisions of section 11-B of the Excise Act cannot be applied. The observations are as follows: 9. Section 11B of the Central Excise Act to be read with Section 83 of the Finance Act, 1994 are not applicable to the fac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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