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Rajasthan State Mines & Minerals Ltd V/S CCE, Jaipur

    Service Tax Appeal No. 1066/2010 (DB) (Arising out of Order-in-Appeal No. 101 (DK) ST/JPR-I/2010 dated 24.03.2010 passed by the Commissioner (Appeals), Central Excise & Customs, Jaipur-I) and Final Order No. 52148/2017
    Decided On, 01 March 2017
    At, Customs Excise Service Tax Appellate Tribunal Principal Bench New Delhi
    By, MEMBER
    For Petitioner: Rinki Arora, Advocate And For Respondents: Neha Garg, DR

Judgment Text

1. The appeal is against order dated 24.03.2010 of Commissioner (Appeals), Jaipur. The brief facts of the case are that the appellants filed a claim for refund of service tax amounting to Rs. 12,68,162/-. The claim is filed on the ground that they have rendered composite service of extraction of minerals along with various incidental works. The same are taxable only w.e.f. 1.6.2007 as "mining service" under Section 65(105) (zzzy) of the Finance Act, 1994. The service tax paid erroneously under the taxable category of "Site Formation" prior to 1.6.2007 should be refunded to them. The lower authorities rejected the claim both on merit as well as on time bar.

2. Ld. Counsel for the appellant submitted that there is no tax liability on the appellant for the mining activities undertaken by them prior to 1.6.2007. Any amount paid erroneously under mistaken belief cannot be retained by the Government and the same has to be returned to the client. The provisions of Section 11B with reference to time bar will not apply to such cases.

3. Ld. AR reiterated the findings of the lower authorities and submitted that any claim for refund has to be in terms of provisions of Section 11B of the Central Excise Act, 1944, made applicable to the provisions of Finance Act, 1994. No relief beyond the statutory provisions can be granted by the Tribunal.

4. We have heard both the sides and perused the appeal records.

5. On merits of the case, we find that the nature of work undertaken by the appellant has been mentioned in the show cause notice as well as in the orders passed by the lower authorities. As per the contract, the contractors were providing various services like removal of over burden, excavation of gypsum, loading of excavated gypsum into the truck, loosening of earth pockets & proper leveling of the mined out area, construction of access roads using mechanical equipments to facilitate movement of trucks/tippers. A plain reading of nature of work clearly indicates that the work undertaken the contract is of composite nature and there is clearly activity of mining of mineral (gypsum) and various other activities are incidental to such mining. We note that even the show cause notice dated 28.11.2008 did not contest the nature of service rendered in the present case. We note that the Board also clarified the taxation of such activities prior to introduction of "mining service" as new tax entry w.e.f. 1.6.2007. In the circular dated 12.11.2007, it is clearly mentioned that the services with reference to making the land suitable for construction of building, factory or civil structure are to be taxed even before 1.6.2007 under the category of "site formation & clearance service". The said circular also clarifies that coal cutting or mineral extraction and lifting them upto the pit head is integral part of the mining operations and are not to be taxed prior to 1.6.2007. In the present case, we note that there is an excavation of gypsum and loading of said gypsum in the mines. Other activities are with reference to the main intention of extraction of gypsum. Accordingly, we find that the lower authorities have not examined the scope of the service with statutory entries during the relevant period. Reference also to be made in this connection to the decision of the Tribunal in National Construction Co : 2014 (34) STR 739 (Tribunal-Delhi).

6. Regarding the applicability of the time bar to the refund claim filed by the appellant, we note that the impugned order considered the date of re-submission of the claim (10.10.2008) for calculating the time limit. Admittedly, the claim was filed by the appellant on 20.03.2008. This was mentioned in the show cause notice also. Certain documents and clarifications called for, were submitted by the appellant on 10.10.2008. We find that the relevant date to calculate the time bar should be the date of initial filing of claim i.e. 20.03.2008. The appellant's eligibility, if any, for refund should be reckoned considering the said date as the relevant date of filing the claim. Regarding non-applicability of the provisions of Section 11B, we find the reliance placed by the appellant on various decisions of Hon'ble High Courts cannot be applied when acting under the powers vested by the Finance Act, 1994/Central Excise Act, 1944. Various High Courts have provided relief to the assessee, without considering the time limit prescribed under Section 11B, invoking the writ jurisdiction under Article 226 of the Constitution. Neither the departmental officers nor the Tribunal have any such powers. It is relevant to note that the Hon'ble Bombay High Court deciding an appeal filed under Section 35G of the Central Excise Act, 1944 held as below:-

"15. Mr. Desai would submit that an unconstitutional levy is also illegal. If the levy is unconstitutional meaning thereby it is null and void ab initio, then, the judgment in Mafatlal Industries (supra) would permit consideration of an application for refund filed belatedly. Mr. Desai submits that all that the judgment of the Nine Judge Bench holds is that unconstitutional and illegal levies cannot be upheld. In his submission, the predominant consideration while giving relief to the petitioners and applicants who seek refund of the amounts paid pursuant to such levies is that they should not be unjustly enriched. We are of the opinion that the Hon'ble Supreme Court may be considering the issue of validity of the provisions like Section 11B(1) introduced in the Central Excise Act, 1944, but the judgment cannot be applied to such an extent as would enable us to totally override and brush aside a provision like Section 11B with the rule of limitation carved out therein. The distinction as pointed out by Mr. Desai from the judgment in the case of Mafatlal Industries (supra) between unconstitutional and illegal levy or in his submission both being treated as par, will not enable us to hold that in the facts and circumstances of the present case the Assistant Commissioner and the Tribunal committed any grave error of law or perversity in rejecting the refund claim. The wider question or controversy need not be gone into in the facts of the present case. Suffice it to hold that once the application for refund was made in terms of the Central Excise Act, 1944, it has to be considered in accordance therewith and not otherwise. If the provision of the Central Excise Act, 1944 has been invoked, then, the same must apply with full force. One cannot agree with the Assessee that the provision may have been invoked, but the claim for refund should be considered by not applying the Rule of Limitation prescribed therein. As has been held by the Hon'ble Supreme court in numerous cases and decisions that the Rule of Limitation is provided in order to uphold a larger public interest. The statutes and Rules of limitation are statutes and prescriptions of repose and peace. They give finality to certain proceedings and orders. The reopening thereof is not permissible beyond a particular limit. In these circumstances we do not see how the Tribunal erred in applying the Rule of Limitation and reversing the order passed by the Commissioner (Appeals). The order of the Assistant Commissioner and that of the Tribunal in the given facts and circumstances cannot be said to be perverse. Both have rejected the claim as in their opinion it was stale and time barred. We do not see how such view can raise a substantial question of law. The view taken is imminently possible. We are, therefore, of the view that the Appeal fails and it is, accordingly, dismissed."
7. The Hon'ble High Court further examined, in detail, the decision of the Hon'ble Karnataka High Court in KVR Construction : 2012 (26) STR 195 (Karnataka) and held the said decision was peculiar to the facts placed before the said High Court. The Hon'ble Bombay High Court recorded that even a writ petition under Article 226 of the Constitution of India cannot be decided by over riding a law or legal regime. There is no warrant or justification for holding that a stale or belated claim can be granted in a constitutional remedy by ignoring a sta

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tutory prescription. 8. In view of the above discussion, we hold that the impugned order is not sustainable as it has not examined the merits of the case in full and correct perspective. The same is set aside. On time limit, we note that the same requires re-consideration by taking original date of filing the claim relevant for deciding the time bar. The provisions of Section 11B will apply. The question of undue enrichment is also required to be examined afresh, in case of eligibility of the appellant for the claim on merit as well as on time bar. The appellant claimed that they have submitted supporting documents including certificate by the Chartered Accountant in this regard. 9. In view of the above findings, we set aside the impugned order and remand the matter back to the Original Authority for a fresh decision on all issues. The appeal is allowed by way of remand.