M/S Giriraj Construction vs Commissioner Of Central Excise, ...
2017 Latest Caselaw 8210 Bom

                                          32-58-CEXA-306-16-2017.DOC




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       IN THE HIGH COURT OF JUDICATURE AT BOMBAY
            ORDINARY ORIGINAL CIVIL JURISDICTION


           CENTRAL EXCISE APPEAL NO. 306 OF 2016



 1. M/s Parijat Construction
 having    Registered    office  at, 8,
 Ratanmanohar Sankul, Near Holkar
 Bridge, Opp. Sunder Narayan Bridge,
 Ravivar Peth, Nashik - 422 002.                       ...Appellant

         Versus

 1. Commissioner of Central Excise
 Nashik,
 Plot No. 155, Sector P-34, NH - Jaishtha
 & Vaishakh, CIDCO, Nashik - 422 008.             ...Respondent

                               WITH
            CENTRAL EXCISE APPEAL NO. 16 OF 2017

 1. M/s Giriraj Construction
 having its Registered office at, 1, Suyojana
 Apartment, Vise Mala, Canada Corner,
 Nashik - 422 002.                                     ...Appellant

         Versus

 1. Commissioner of Central Excise
 Nashik,
 Plot No. 155, Sector P-34, NH - Jaishtha
 & Vaishakh, CIDCO, Nashik - 422 008.             ...Respondent




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                                             32-58-CEXA-306-16-2017.DOC




 Mr. B.J. Raichandani, with Mr. Anshul Jain,for the Appellant.
 Mr. M. Dwivedi, with Ms. Shalaka Gujjar, for the Respondent.

                               CORAM:   A.S. OKA &
                                        RIYAZ I. CHAGLA, JJ.

JUDGMENT RESERVED ON 4TH SEPTEMBER 2017

JUDGMENT PRONOUNCED ON 13TH OCTOBER 2017.

O R A L J U D G M E N T :- (Per Riyaz I. Chagla J.)

1. The Appellants by the present Appeals are challenging

a common order dated 5th May 2016 passed by the

Customs, Excise and Service Tax Appellate Tribunal, West

Zonal Branch at Mumbai (for short "Appellate Tribunal") by

which the Orders-in-Appeal Nos. AKP/104/NSK/2009 and

AKP/104/NSK/2009, both dated 18th November 2009 passed

by the Commissioner (Appeals) of Central Excise and

Customs, Nashik were upheld. For the sake of convenience,

we are referring to the facts in Appeal No. 306 of 2016.

2. The Appellant is engaged in providing "Commercial or

Industrial Construction" service and are registered as a

service provider under that category. The Appellant had

during the period May 2006 to November 2007 secured a

32-58-CEXA-306-16-2017.DOC

contract from Mumbai Educational Trust for construction of

administration and Core Course building. The Appellant

being under the bonafide belief that the transaction attracts

service tax paid the same without collecting the same from

the customer and deposited it to the credit of the Central

Government. The Appellant filed a refund claim on 11th

March 2008 for Rs.12,62,900/-. The refund claim was filed as

the Appellant had provided construction services for use of

organisation or institutions being established solely for

educational, religious, charitable, health, sanitation or

philanthropic purposes and not for purposes of profit and

were thus exempted as per the department clarification

issued under para 13.2 of CBEC circular No. 80/10/2004-ST

dated 17th September 2004. A show cause notice dated 30th

May 2008 issued to the Appellant by the Assistant

Commissioner to show cause as to why the Appellant's claim

for refund shall not be rejected. The Appellant filed a detailed

reply to the show cause notice. The Assistant Commissioner

vide Order-in-Original No. 05/ST.(R)/2009 dated 31st March

2009 rejected the refund claim for Rs.9,73,292/- filed by the

Appellant as not been sustainable on account of the refund

32-58-CEXA-306-16-2017.DOC

claim being time barred under the provisions of Section 11

of the Central Excise Act, 1944. The refund claim of Rs.

2,89,608/- was allowed. The Appellant being aggrieved and

dissatisfied with the said orders filed Appeal before the

Commissioner of Central Excise (Appeals), Nashik. By Order-

in-Appeal dated 18th November 2009, the Commissioner

(Appeals) partly allowed the Appeals of the Appellant to the

extent of Rs.73,330/- and for the remaining amounts the

Orders-in-Original were upheld. The Appellant filed Appeal

before the Appellate Tribunal challenging the said order of the

Commissioner (Appeals). By the impugned order dated 5th

May 2016, the Appellate Tribunal dismissed the Appeal filed

by the Appellant. Hence the present Appeal has been filed.

3. Mr. Raichandani, learned counsel for the Appellant has

submitted that Section 11 B of the Central Excise Act which

prescribes the time period of one year for filing a refund claim

is inapplicable in the case of refund for service tax which was

paid under mistake of law. Mr. Raichandani has further

submitted that the Appellate Tribunal has erroneously applied

Section 11 B of the said Act in the present case where

32-58-CEXA-306-16-2017.DOC

admittedly the Appellant had paid service tax on commercial

or industrial construction service though such service was not

leviable to service tax. The Appellate Tribunal has arrived at

an erroneous finding that since refund of any amount is

governed by Section 11 B, there would be no other provision

of limitation for filing a refund claim and that the Appellate

Tribunal being a creature under the Central Excise / Customs

Act cannot go beyond the statute and relax time prescribed

under the statute. The Appellate Tribunal rejected the refund

claim of the Appellant on the ground that it was filed after one

year and hit by limitation and thereby the upheld the orders of

the Commissioner (Appeals). Mr. Raichandani has relied

upon a judgment of the Division Bench of this Court in

Hindustan Cocoa Products Vs. Union of India 1 and

another judgment of Division Bench of this Court (Nagpur

Bench) in the case of The Commissioner Central Excise,

Nagpur Vs. M/s. SGR Infratech Ltd.2 in support of his

contention that, the limitation prescribed under Section 11

of the said Act is not applicable, where admittedly the tax

1 1994 (74) ELT 525 (Bom.) 2 Central Excise Appeal No. 26 of 2014 dated 28th October 2015.

32-58-CEXA-306-16-2017.DOC

could not have been demanded and / or service tax was paid

under a mistake of law. Mr. Raichandani has also submitted

that the Supreme Court order relied upon by the Appellate

Tribunal viz. Collector of C.E., Chandigarh Vs. Doaba Co-

Operative Sugar Mills3 would not be applicable as an

exception has been culled out in cases where duty was paid

under the mistake of law. In the present case where

admittedly the Appellant had paid service tax on Commercial

or Industrial Construction Service although such services

were not liable to service tax.

4. Mr. Dwivedi learned counsel for the Respondent has

supported the impugned order. Mr. Dwivedi contended that

limitation prescribed under Section 11 B under the said Act is

applicable to all refund claims and since the refund claims of

the Appellant was filed beyond one year from the date of

payment of service tax, the refund claim was correctly held by

the Appellate Tribunal to be hit by limitation.

3 1988(37) E.L.T. 478 (S.C.).

32-58-CEXA-306-16-2017.DOC

5. We are of the view that the issue as to whether

limitation prescribed under Section 11 B of the said Act

applies to a refund claimed in respect of service tax paid

under a mistake of law is no longer res integra. The two

decisions of the Division Bench of this Court in Hindustan

Cocoa (Supra) and Commissioner of Central Excise,

Nagpur V/s. M/s. SGR Infratech Ltd. (Supra) are squarely

applicable to the facts of the present case.

6. Both decisions have held the limitation prescribed

under Section 11 B of the said Act to be not applicable to

refund claims for service tax paid under a mistake of law. The

decision of the Supreme Court in the case of Collector of

C.E., Chandigarh Vs. Doaba Co-Operative Sugar Mills

(Supra) relied upon by the Appellate Tribunal has in applying

Section 11 B, limitation made an exception in case of refund

claims where the payment of duty was under a mistake of

law. We are of the view that the impugned order is erroneous

in that it applies the limitation prescribed under Section 11

of the Act to the present case were admittedly Appellant had

paid a service tax on Commercial or Industrial Construction

32-58-CEXA-306-16-2017.DOC

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.

7. We accordingly allow the present Appeals and quash

and set aside the impugned order, in so far as it is against the

Appellant in both Appeals. We fully allow refund of

Rs.8,99,962/- preferred by the Appellant. We direct that the

Respondent shall refund the amount of Rs.8,99,962/- to the

Appellant within a period of three months. There shall be no

order as to costs.

       (RIYAZ I. CHAGLA J.)                ( A.S. OKA, J.)