M/S Pec Limited vs Cst, Delhi

1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 26 of the CESTAT (Procedure) Rules, 1982?

2 Whether it should be released under Rule 26 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3 Whether their Lordships wish to see the fair copy of the Order?

4 Whether Order is to be circulated to the Departmental authorities?

Service Tax Appeal No. 53352 of 2014-SM

(Arising out of order in appeal No. 56/ST/DLH/2014 dated 24.03.2014 passed by the Commissioner (Appeals), Central Excise, Delhi-I.)

M/s PEC Limited Appellant

Vs.

CST, Delhi Respondent

Appearance:

Shri Atul Gupta, C.A. for the appellant

Sh. Amresh Jain, DR for the Respondent

Coram: Honble Mr. Justice G. Raghuram, President

Final Order No. 51746/2015

Per: Justice G. Raghuram:

The claimant for a refund which was rejected by the primary and the lower appellate authorities is in appeal, against the order dated 24.03.2014 passed by the learned Commissioner (Appeals), Delhi-I. The impugned order rejected an appeal preferred against the primary adjudication order dated 28.10.2013 passed by the Assistant Commissioner who rejected the refund claim for Rs.17,78,084/-. The refund claim was preferred on 20.06.2012. The authorities below rejected refund on the bar of limitation under Section 11B of the Central Excise Act, 1944.

2. The appellant provided the taxable business auxiliary service. On 31.03.2010, the appellant remitted service tax of Rs.17,78,084/- on the assumption that this was due on a consideration of Rs.1,73,34,193/- which was reflected in the appellants books of accounts as income on the rendition of business auxiliary service. It appears that this amount was reflected in the books of accounts of the appellant on accrual basis but no part of this amount was in fact received during the relevant period.

3. The appellant received Rs.84,70,000/- in October 2011 and Rs. 88,64,193/- in March 2012 on the business auxiliary service it provided during the period 2009-10 and again remitted service tax on these two amounts inadvertently and without realising that service tax was already remitted on the same consideration, on 31.03.2010.

4. On 20.06.2012, appellant filed a claim for refund of the amount remitted on 30.03.2010, clearly beyond the period of limitation specified in Section 11B of the Central Excise Act, 1944. The authorities below therefore concurrently held that the refund claim is barred by the limitation period specified in Section 11B.

5. Learned Counsel for the appellant would place reliance on the judgment of the Gujarat High Court in CC Patel & Associates (P) Limited vs. Union of India -2013 (32) STR 392 (Guj.) and the judgment of the Karnataka High Court in CCE (Appeals), Bangalore vs. KVR Construction  2012 (26) STR 195, for the proposition that since remittance of the amount in March 2010 was in respect of a consideration for rendition of a taxable service which was not received by the appellant, there was no liability to remit tax on receivables; that retention by Govt. of the amount so remitted would amount to an unconstitutional exaction and therefore the claim for refund is outside the bar of limitation.

6. It requires to be noticed that a ld. Division Bench of the Bombay High Court in Andrew Telecom (I) Pvt. Ltd. vs. CC&CE, Goa  2014 (34) STR 562 (Bom.) distinguished the judgment of the Karnataka High Court in KVR Construction and ruled that relief even in a Writ Petition under Article 226 of the Constitution cannot be granted beyond the period of limitation statutorily enjoined and that there was no warrant or justification for the conclusion that relief under Article 226 could be granted ignoring a statutory prescription.

7. It requires to be noticed that the Delhi High Court in Jumax Foam (P) Ltd. vs. Union of India  2003 (157) ELT 252 (Del.) clearly ruled, following the judgment in Mafatlal Industries Limited vs. Union of India  (1997) 5 SCC 536, that even where a tax is collected by authorities under the Act by misinterpreting or misapplying any of the rules, regulations or Notification or by an erroneous determination of the relevant facts, i.e. an erroneous finding of fact, the same would be an illegal levy; and for refund of the aforesaid amount, a claim has necessarily to be preferred under and in accordance with provisions of the respective enactments before authorities specified thereunder and within the period of limitation prescribed therein. The Delhi High Court concluded that even for refund of an illegal levy a claim application requires to be made within the prescribed period of limitation. The above principle is axiomatic and has also been reiterated by the jurisdictional High Court in Jumax Foam Pvt. Limited. The Tribunal is thus bound to follow the same.

8. On the aforesaid analyses, the concurrent orders of the primary and appellate Authorities warrant no appellate inference. The appeal is therefore rejected. No order as to costs.

(Justice G. Raghuram)

President

Pant

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