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
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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,
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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
1997 (89) E.L.T.247 (S.C.)
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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
2008 (221) ELT 336 (Del.)
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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.,
2012 (26) S.T.R. 195 (Kar.)
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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.
2020 (35) G.S.T.L. 52 (Telangana)
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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
