Telangana High Court
Commissioner Of Customs And Central ... vs M/S. Credible Engineering ... on 15 April, 2024
Author: N.Tukaramji
Bench: N.Tukaramji
THE HONOURABLE SRI JUSTICE SUJOY PAUL
AND
THE HONOURABLE SRI JUSTICE N. TUKARAMJI
CENTRAL EXCISE APPEAL No.03 of 2023
JUDGMENT:
(per Hon'ble Sri Justice Sujoy Paul) Mr. Dominic Fernandes, learned Senior Standing Counsel for Central Excise, Customs & Service Tax Department (CBIC) for the appellant and Mr.Karan Talwar, learned counsel for the respondent.
2. Heard on admission.
3. This appeal filed under Section 35G of the Central Excise Act, 1944 (for short "the Act, 1944") takes exception to the order dated 05.09.2022 passed in Service Tax Appeal No.30781 of 2018 by the Customs, Excise and Service Tax Appellate Tribunal, Regional Bench at Hyderabad (Tribunal), whereby the appeal filed by the respondent was allowed by the said Tribunal.
4. It was pointed out that the respondent worked pursuant to 'Works Contract' between the period from SP,J & NTR,J cea_3_2023 2 30.09.2012 to 30.06.2014 and paid service tax arising thereto. On 10.02.2017, it filed an application for refund of Service Tax of Rs.1,60,81,347/- by contending that under the Act, 1944 it was not liable to pay the tax and tax was paid as a mistake of law. The said application was dismissed on 05.06.2017 by the Assistant Commissioner of Customs, Central Excise & Service Tax, Hyderabad.
5. Aggrieved by the said order, the respondent-company preferred an appeal, which came to be dismissed on 28.02.2018 by the Commissioner of Customs and Central Tax (appeals-I), Hyderabad. The respondent then approached the Customs, Excise & Service Tax Authority by filing Service Tax Appeal No.30781 of 2018.
6. During the course of hearing, it is pointed out that there was a cleavage of opinion amongst the Members of the Tribunal regarding the aspect of limitation as per Section 11B of the Act, 1944. Resultantly, the matter was sent for obtaining another opinion of Third Member. The learned Third Member opined that when tax was paid as a mistake of law, the limitation under Section 11B of the Act, SP,J & NTR,J cea_3_2023 3 1944 is not a hurdle for refund of tax. In view of majority opinion, the impugned decision was taken by holding that Section 11B of the Act, 1944, cannot be pressed into service, in a case of this nature where tax itself is admittedly paid as a mistake of law.
7. Mr.Dominic Fernandes, learned counsel for the appellant fairly submits that he is proposing only one substantial question of law i.e., "whether, while processing/considering a claim for refund, the limitation contemplated under Section 11B of the Excise Act, made applicable to service tax under Section 83 of the Finance Act, 1994 would be applicable or inapplicable, in a case where any amount even though it is not payable as service tax, is voluntarily paid by the assessee?"
8. To elaborate, he placed reliance on the judgment of the Hon'ble Supreme Court in Mafatlal Industries Ltd. v Union of India 1. He submits that in the light of this judgment, the Tribunal has committed an error of law 1 1997 (89) E.L.T.247 (S.C.) SP,J & NTR,J cea_3_2023 4 which has given rise to the aforesaid substantial question of law. The other side raised objection.
9. We have heard the matter at length. It is seen that the single question raised by Mr. Dominic Fernandes, learned counsel is no more res integra. In the manner proposed question is framed, it is not in dispute that service tax was not payable by the assessee. This question came up for consideration before the Delhi High Court in Hind Agro Industries Limited v. Commissioner of Customs 2. After considering the judgment of the Hon'ble Supreme Court in case of Mafatlal Industries Ltd. (supra 1), the Delhi High Court held that the judgment of Mafatlal Industries Ltd. (supra
1) nowhere talks of a situation where the refund of a tax paid under the relevant Act albeit erroneously was required to be made under the Excise Act or the Customs Act and under no other enactment. It was clearly held that judgment of Mafatlal Industries Ltd. (supra 1) is of no 2 2008 (221) ELT 336 (Del.) SP,J & NTR,J cea_3_2023 5 assistance in a case where tax is erroneously paid as a mistake of law.
10. The Tribunal has also taken note of the judgment of Karnataka High Court in Commr. of C.Ex. (Appeals), Bangalore v. KVR Construction 3. The Karnataka High Court also considered the judgment of Delhi High Court in case of Hind Agro Industries Limited (supra 2) and the judgment of Mafatlal Industries Ltd. (supra 1) and in no certain terms made it clear that where the tax is admittedly paid as a mistake of law, the limitation will not come in the way for refund.
11. It is pointed out by both sides that the judgment of Karnataka High Court in case of KVR Construction's (supra 3) was unsuccessfully challenged before the Hon'ble Supreme Court and SLP was dismissed on 11.07.2011 which is taken note of by the Tribunal.
12. The judgment of this Court in Vasudha Bommireddy v. Assistant Commissioner of S.T., 3 2012 (26) S.T.R. 195 (Kar.) SP,J & NTR,J cea_3_2023 6 Hyderabad 4 was relied upon by other side by contending that the judgment of Karnataka High Court in KVR Construction (supra 3) was considered and this Court also held that when a tax is paid as a mistake of law, the embargo of limitation will not come in the way of claim of refund.
13. We have gone through the aforesaid judgments of the Delhi, Karnataka and the judgment of this Court in case of Vasudha Bommireddy (supra 4). The common string in all the above judgments is that if the contractor was not liable to pay tax, the department cannot retain the amount paid and in that view of the matter, bar of limitation under Section 11B of the Act, 1944 cannot be pressed into service.
14. In this view of the matter, in our opinion, no substantial question of law subsists and needs to be answered, because curtains are already drawn on this issue by various High Courts. Thus, admission is declined. 4 2020 (35) G.S.T.L. 52 (Telangana) SP,J & NTR,J cea_3_2023 7
15. Accordingly, the Central Excise Appeal is dismissed. No costs.
Interlocutory applications, if any pending, shall also stand closed.
_______________________ JUSTICE SUJOY PAUL _________________________ JUSTICE N.TUKARAMJI 15th April, 2024 YVL/ns