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Computer Age Management Services Pvt. Ltd V/S Commissioner of Central Excise, LTU, Chennai

    Appeal No. ST/427/2010 (Arising out of Order-in-Appeal No. 45/2010 dt. 26.03.2010 passed by the Commissioner of Central Excise (Appeals), LTU, Chennai) and Final Order No. 41983/2017
    Decided On, 06 September 2017
    At, Customs Excise Service Tax Appellate Tribunal South Zonal Bench At Chennai
    By, MEMBER
    For Petitioner: R. Raghavan and M. Kannan, Advocates And For Respondents: B. Balamurugan, AC (AR)

Judgment Text

1. The appeal is against order dt. 26.03.2010 of Commissioner (Appeals), LTU, Chennai.

2. The appellants are registered with service tax department for discharging service tax under various categories. On 05.03.2008, they have filed a claim for refund of service tax of Rs. 20,36,51,670/- paid during the period August 2003 to March 2006. The claim was on the ground that the services rendered by them as registrar to issues and stock transfer agent were liable to tax only w.e.f. 1.5.2006. The service tax paid by them under the category of Business Auxiliary Service during the period August 2003 to March 2006 is liable to be refunded to them. The claim was examined and the original authority vide his order dt. 04.06.2008 rejected the said claim both on merit and on limitation. On appeal, vide the impugned order, the Commissioner (Appeals) upheld the original order on merit. He observed that as the appellants are not eligible for refund, the consequential question of time bar and unjust enrichment do not arise at all.

3. Ld. counsel for the appellant submitted that they are eligible for refund on merit as well as on limitation. On limitation, he submitted that the amount paid by them during the relevant period should not be considered as service tax. They are entitled for return of the money which is paid due to bona fide mistake of understanding. When the tax itself is not payable, the provisions of Section 11B to apply period of limitation cannot be invoked. He also elaborately submitted on the merits of the case regarding their entitlement for refund. He relied on the following decisions of the Tribunal:

(i) Hexacom (I) Ltd. Vs. CCE Jaipur : 2006 (3) STR 131 (Tri.-Del.)

(ii) CCE Pune-III Vs. Shankar Ramchandra Auctioneers : 2010 (19) STR 222 (Tri.-Mumbai)

(iii) Jubilant Enterprises P. Ltd. Vs. CCE Mumbai-I : 2014 (35) STR 430 (Tri.-Mumbai)

4. The Ld. A.R. contested the appeal and submitted that the claim is hit by time bar. The department cannot act beyond the legal provisions of Section 11B made applicable to service tax. When the time limit was not adhered to, jurisdictional officer cannot consider the claim at all. In the present case, the claim was rejected by the original authority, both on merit as well as on limitation. Though the Commissioner (Appeals) held against the appellant only on merit, he observed that he is not examining the limitation and unjust enrichment as, on merit, he has held against the appellant. The Ld. A.R. also submitted that there are instances of High Court allowing refund beyond the stipulated time of Section 11B while exercising writ jurisdiction on the ground that the amount collected being not a tax should be restored to the claimant. He submitted that such case laws cannot be relied upon by the Tribunal while deciding the limitation which should be in terms of the statutory provision.

5. We have heard both sides and perused appeal records. Since there is a strong case regarding limitation in the present appeal, we deem it fit to examine this basic issue. Admittedly, the claim was filed beyond the period of one year as fixed by Section 11B. The appellant also is not disputing this. However, they are claiming that the amount paid by them under mistaken understanding of law cannot be considered as a tax and should be restored to them. The time limit under Section 11B will apply only to the tax receipts and not to the amount which is not at all a tax. We note that the submission of the appellant is legally not tenable. The admitted facts are that the appellants discharged the amount to the government under the category of service tax and remitted the same during the relevant time in terms of provisions of Finance Act, 1994. The amount has been paid as service tax and appropriated as part of Consolidated Fund of India by the Government. Any return of such amount should be governed by the legal provision which governs collection of such amount. In the present case, Section 11B of Central Excise Act, 1994 made applicable to the provisions of services tax is correctly invokable to determine the limitation. The decisions of the Tribunal relied upon by the appellant will not help his cause. We note that the Hon'ble Bombay High Court in Andrew Telecom (I) Pvt. Ltd. Vs. CC & CEX Goa : 2014 (34) STR 562 (Bom.) examined this issue elaborately. The Hon'ble High Court held at para-19 as follows:

"19.? Before us, the undisputed position is that the amount was paid by the Appellant as Service Tax. That tax was not imposable or leviable on export of services was a clarification made by the Department and relying on that clarification, the refund of duty or Service Tax was claimed. This was squarely a case falling within the provisions of the Central Excise Act, 1944 and therefore, the rule of limitation under Section 11B was applied. That was applied when the application for refund was made invoking Section 11B of the Central Excise Act, 1944. We have no manner of doubt that when this was the provision invoked, same applies with full force including the rule of limitation prescribed therein. For these reasons, we are of the opinion that the decisions relied upon cannot be of any assistance."
6. In the above decision, the Hon'ble High Court categorically held that there is no warrant or justification for holding that a stale or belated claim can be granted in a constitutional remedy by ignoring a statutory prescription. The decision of the High Court was on an appeal filed by the assessee challenging the decision of the Tribunal on the applicability of limitation when the tax was purportedly paid by mistake understanding of law.

7. The Hon'ble Madras High Court in Nataraj and Venkat Associates: 2015 (40) STR 31 (Mad.) held as below:

"8.? From the materials available on record, it is seen that the amounts were credited to the Revenue under the Head of Account 0044-Service Tax through TR-6 challans, which are purported for payment of Service Tax only and as such, the claim of the respondent that the payment was only deposit and not Service Tax, cannot be sustained. Further, a tax, be it, direct or indirect, is intended for immediate expenditure for the common good of the state and it would be unjust to require its repayment after it has been in whole or in part expende

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d, which would often be the case in most payment of such sort. Therefore, it is impracticable for the authorities to refund applications that are filed beyond time even it is paid under a mistake of law. Therefore, the authorities have rightly rejected the claim of the respondent and this aspect has not been taken note of by the learned single Judge." 8. On the basis of our discussions and analysis, we find that no refund can be considered by Revenue if the claim for the same was filed beyond the prescribed time limit in terms of Section 11B. Accordingly, without going into the merits of the claim, we hold that in the present case, the claim cannot be entertained. Accordingly, the appeal is rejected.