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TMI Blog2024 (10) TMI 1060X X X X Extracts X X X X X X X X Extracts X X X X ..... ra Maritime Broad for development of a port near Karanja Creek, Uran, in the district of Raigad. The terms of the agreement were that the land and infrastructural facility provided on lease shall be for a period of 30 years on Build, Own, Operate and Transfer basis (BOOT). For development of the said Port, the assessee-appellants had availed the services of the service providers viz., M/s ITD Cementation India Ltd. and M/s Sahara Dredging Ltd., and for that purpose, had entered into the agreements on 30.10.2013 and 21.11.2014, respectively with those service providers. 1.3 Construction services pertaining to a port was exempted from payment of service tax in terms of Sr. No.14(a) of the Notification No. 25/2012 dated 20.06.2012. However, w.e.f. 01.03.2015, vide Notification No. 6/2015-ST dated 01.03.2015, the said exemption provided under the earlier notification dated 20.06.2012 was withdrawn, by omitting the words "an airport, port or...". Owing to the reason of withdrawal of the exemption, the service providers M/s. M/s ITD Cementation India Ltd. and Sahara Dredging Ltd. had started collecting service tax from the appellants and paid the same into the Government exchequer. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0,99,124/- in favour of the assessee-appellants and upheld rejection of refund claim amount of Rs. 6,13,77,646/-. 1.6 To the extent, the impugned order has allowed the refund claim amounting to Rs.5,90,99,124/-, Revenue has preferred appeal before the Tribunal, which was numbered as ST/85457/2020. The assesseeappellants have also assailed the impugned order, to the extent it has denied the refund benefit of Rs. 6,13,77,646/-. The said appeal of the assessee-appellant was numbered as ST/85110/2020. 1.7 Both the above appeals filed by the assessee-appellant as well as the Revenue were disposed of by the Tribunal vide Final Order No. A/85081-85082 dated 13.01.2021, holding that refund claims are not maintainable and had also held that the original authority should look into the matter of allowance for re-credit of the amount of ITC debited by the assessee-appellants, if permissible under the GST law. Accordingly, for the said limited purpose, the matter was remanded by the Tribunal to the original authority. 1.8 The order dated 13.01.2021 passed by the Tribunal was assailed by the assessee-appellant by way of filing an appeal before the Hon'ble Bombay High Court. The appeal was dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se Act, 1944 (for short, 'the Act of 1944), made applicable to service tax matter under Section 83 of the Finance Act, 1994 (for short, 'the Act of 1994). The said statutory provision under the Act of 1944 mandates that any person claiming any refund of duty of excise (service tax herein), may make an application for refund to the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise, before the expiry of one year from the relevant date. The phrase 'relevant date' has also been defined in clause (B) appended to the Explanation to Section 11B of the Act of 1944. In the case of the assessee-appellants, the relevant date has to be construed as per subclause (f) of clause (B) to the said Explanation as 'the date of payment of duty'. 5.1 The assessee-appellants have claimed that they had filed the first refund application through online on 25.09.2017 and thereafter, had furnished the manual refund claim application along with requisite documents on 27.10.2017. Thus, they have submitted that since the initial refund application was filed on 25.09.2017, the claim is within prescribed time limit as per Section 11B of the Act of 1944 and as such, they are entitl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ince the service providers have erroneously paid the service tax into the Government exchequer and claimed the same from the assessee-appellants, the application filed for claim of refund, is not barred by limitation of time as per Section 11B of the Act of 1944. In this case, the assessee-appellants have filed the applications on 27.10.2017 and on 22.12.2017, claiming refund of service tax paid by the service providers into the Government exchequer. The said applications were filed pursuant to the Act of 2016, wherein service tax exemption was provided retrospectively for the period from 01.04.2015 to 29.02.2016. Availment of exemption under such enactment is subject to the condition that the refund application shall be filed within a period of 'six months' from the date of assent of the President of India regarding such enactment. The Finance Act, 2016 got the assent of the President of India on 14.05.2016. As per the mandates under the Act of 2016, the refund application was required to be filed by the assessee-appellants within six months from the date of such assent. In this case, the time limit of six months provided under Section 103 of the said Act of 1994 expired on 13.11. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnment of India certifies that the original works contract had been entered into between the parties before 01.03.2015. In sub-section (3) of Section 103 of the Act of 1994, it has been mandated that an application for the claim of refund of service tax shall be made within a period of six months from the date on which, the Finance Bill, 2016 receives the assent of the President. On reading of the said statutory provision, it transpires that time taken for pursuing the matter with the Line Ministry cannot be considered as a defensible ground for exclusion of such time for computation of the normal period of six months for filing of the refund application. Further, the said statutory provision has mandated that the refund application 'shall be made' within such prescribed time frame. The use of the phrase 'shall' in sub-section (3) of Section 103 of the Act of 1994 makes the position abundantly clear that the condition is neither directory in nature, nor any discretion has been vested with the authorities to condone the delay in filing of the refund application. In other words, filing of refund application within a prescribed period of six months is the mandatory requirement and suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. The Commissioner and the High Court were therefore justified in holding that there was no power to condone the delay after the expiry of 30 days period." 5.5 On reading of both Section 11B of the Act of 1944 and Section 103 of the Act of 1994, it transpires that the time line has been prescribed therein for consideration of the refund application filed by the assessee. Where the statute has prescribed a particular time limit, then the authorities functioning under such statute cannot alter such time line, in order to adopt some other time frame for consideration of the refund application. In this regard, the Hon'ble Supreme Court, in the case of Collector of C.E., Chandigarh Vs. Doaba Co-operative Sugar Mills - 1988 (37) E.L.T. 478 (S.C.) have dealt with and determined the issue in the following manner: "6. It appears that where the duty has been levied without the authority of law or without reference to any statutory authority or the specific provisions of the Act and the Rules framed thereunder have no application, the decision will be guided by the general law and the date of limitation would be the starting point when the mistake or the error comes to light. But in mak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... application. Under the second category, if the tax amount has been paid by the assessee, owing to the reason of mis-interpretation/ mis-application / erroneous interpretation of either of the Act of 1944, or the Act of 1994, or the rules framed thereunder, then in such case, the provisions of the statute including the prescribed time limit shall be followed for claiming refund of the tax amount paid, inasmuch as such erroneous payment was made under the particular statute and also the amount was credited in the appropriate 'heads of account' framed and designed by the Central Government for the such specific head of taxation. In the present case, the prescribed accounting code for collection and retention of 'service tax' in the government exchequer is '0044'. Since, as a result of excess payment, such amount was required to be adjusted in the respective accounting head by way of granting refund; then, the provisions of the concerned statute should be strictly adhered to. The third category of refund mentioned herein above has no application to the facts of the present case. The relevant paragraphs in the case of Mafatlal Industries (supra) are quoted herein below: "137. ....... ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . [Emphasis supplied] Here also, the appropriate action should be laid within the period of limitation provided by the appropriate law and also can invoke Section 72 of the Contract Act, as the case may be..." 5.7 On careful reading of the constitutional Bench judgment of the Hon'ble Supreme Court (supra), the position of law would be made clear that the time line provided in Section 11B of the Act of 1944 is not an empty formality and the same has to be strictly followed, by the person who seeks refund. Though, recourse can be had to Section 72 of the Contract Act, 1872, but in this case, the appellants had not chosen for seeking remedy under the said provisions. Since, the appellants had filed the refund claim in the form and manner prescribed under Section 11B of the Act of 1944, the provisions contained therein alone have the application and accordingly, the department had acted upon, based on such statutory provision in disposal of such refund applications. Thus, in our considered view, since the appellants had not filed the refund applications within the stipulated time frame of 'one year', rejection of the claim amounting to Rs.6,13,77,646/- by the learned Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gainst such order, Revenue has preferred appeal before the Tribunal, being numbered as ST/85457/2020. We find that the reason behind allowing such refund benefit by the learned Commissioner (Appeals) was that the claimant of refund has complied with the statutory provisions, including the limitation of time prescribed thereunder. Since, the Central Government has specifically issued the notification, in exempting payment of service tax with retrospective effect, on the activities of construction, erection, commissioning or installation of original works pertaining to port, the appellants, as the recipient of such service, having been borne the tax burden, were entitled for grant of refund of such excess payment of service tax made by them. Therefore, we do not find any merits in the appeal filed by Revenue. 7.1 As a consequence of the favorable order dated 30.08.2019 passed by the learned Commissioner (Appeals), in sanctioning refund claim amounting to Rs.5,90,99,124/- in favour of the assessee-appellants, Revenue has preferred appeal before this Tribunal along with application for stay of grant of refund. From the appeal records, we observe that the stay application of Revenue wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tte, on such duty from the date immediately after the expiry of three months from the date of receipt of such application till the date of refund of such duty : Provided that where any duty ordered to be refunded under subsection (2) of section 11B in respect of an application under subsection (1) of that section made before the date on which the Finance Bill, 1995 receives the assent of the President, is not refunded within three months from such date, there shall be paid to the applicant interest under this section from the date immediately after three months from such date, till the date of refund of such duty. Explanation.-Where any order of refund is made by the Commissioner (Appeals), Appellate Tribunal , National Tax Tribunal or any court against an order of the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise, under sub-section (2) of section 11B, the order passed by the Commissioner (Appeals), Appellate Tribunal, National Tax Tribunal or, as the case may be, by the court shall be deemed to be an order passed under the said subsection (2) for the purposes of this section." 7.3 On reading of the main part together with the Explanation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13.01.2023, delivered by the Hon'ble High Court of Bombay. In the said judgement, while setting aside the order of the Tribunal, the Hon'ble High Court has directed for restoration of the appeal in the file of the Tribunal for a decision on merits, as per law. Pursuant to the judgement dated 13.01.2023, the appeal with regard to the refund claim amounting to Rs.5,90,99,124/- was taken up for hearing by the Tribunal. In the present order (at paragraph 6 above), Revenue's appeal is being dismissed, holding that the Order-in-Appeal dated 30.08.2019 passed by the Commissioner (Appeals), in sanctioning the refund is proper and justified. Since, it has been held that the assessee-appellants should be entitled for refund of an amount of Rs.5,90,99,124/-, the present adjudication order dated 30.11.2021 passed by the learned Principal Commissioner, in confirming such demand along with interest, concerning the same issue, cannot be sustained and accordingly, is liable to be set aside. 9. To sum up, all the four appeals filed by both the assesseeappellants and the Revenue are disposed of in the following manner: Sr No. Appeal Nos. Order Relevant Paragraphs, in support of the present ..... X X X X Extracts X X X X X X X X Extracts X X X X
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