Mangam Construction Company vs Commissioner Of Service Tax ...

[Arising out of Order-in-Appeal No. 311/2011 dated 25/04/2011 passed by the Commissioner of Central Excise, Bangalore]

For approval and signature: HON'BLE SHRI. ASHOK KUMAR ARYA, TECHNICAL MEMBER

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? Yes 3 Whether Their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes

Mangam Construction Company No.55/7A, Haralukunte Village, HSR Layout, Sector-II, Bangalore - 560 034 Appellant(s) Versus

Commissioner of Service Tax Bangalore-Service Tax 1st To 5th Floor, TTMC Building, Above BMTC Bus Stand, Domlur Bangalore  560 071 Karnataka Respondent(s)

Appearance:

Shri. B.G. Chidananda Urs, Advocate #520, Amruth Nivas, 7th Main, 13th Cross, RMV II Stage, Dollars Colony, Bangalore  560 094 Karnataka For the Appellant

Shri. Pakshi Rajan, DR For the Respondent

Date of Hearing: 10/08/2015 Date of Decision: 10/08/2015 CORAM:

HON'BLE SHRI. ASHOK KUMAR ARYA, TECHNICAL MEMBER

Final Order No. 21772 / 2015

The appellant as well as the respondent, both have been heard. The appellant is pleading for sanction of refund in their favour in case of Construction Services which have been found to be liable for service tax since 01.07.2010 as per decision of the Tribunal Delhi Bench in Krishna Homes Vs. CCE, Bhopal.

2. Initially by the order-in-original the appellant was sanctioned the refund of Rs. 20,41,771/- (Rupees Twenty Lakhs Forty One Thousand Seven Hundred and Seventy One only) which was not paid to the appellants citing the reason of unjust enrichment and the said sanctioned amount was credited to the Consumer Welfare Fund as per the provisions of Section 11B(2) of Central Excise Act 1944.

3. The appellant went in appeal to the Commissioner (Appeals) who rejected their refund claim saying that doctrine of unjust enrichment was applicable. Thereafter the appellant has come to the Tribunal in the present case.

4. The appellant has mentioned that they had deposited the money with the department during the investigation by the DGCEI and finally they were not found liable for payment of service tax which is evident by the Commissioner of Service Tax, Bangalores Review Adjudication Order No. 26/2010 dated 11.06.2010, submitted by the learned advocate of the appellant, Mr. B.G. Chidananda.

5. The appellant pleaded that they collected the service tax amount of Rs. 3,28,738/- (Rupees Three Lakhs Twenty Eight Thousand Seven Hundred and Thirty Eight only) from their customers and paid the same accordingly to the exchequer and this amount they are not claiming as refund as they are not entitled to the same.

6. The learned advocate Shri. B.G. Chidananda appearing for the appellant relys on the decision of the Honble High Court of Madras in the case of Commissioner of Central Excise, Coimbatore Vs. M/s. Pricol Ltd., Coimbatore and others [2015-TIOL-515-HC-MAD-CX] delivered on 12.02.2015 wherein it has inter alia been held that the deposits made at the time of investigations are in the nature of deposits made under protest and principle of unjust enrichment does not apply to the same. In the said decision, the Honble High Court inter alia held as below:

7.There is no dispute with regard to the proposition of law as laid down by the Supreme Court. In the present case, as is evident from the records, it is not a case of refund of duty. It is a pre-deposit made under protest at the time of investigation, as has been recorded in the original proceedings itself. In this regard, it has to be noticed it has been the consistent view taken by the Courts that any amount, that is deposited during the pendency of adjudication proceedings or investigation is in the nature of deposit made under protest and, therefore, the principles of unjust enrichment does not apply. The abovesaid view has been reiterated by the High Court of Bombay in Suvidhe Ltd.  Vs - Union of India (1996 (82) ELT 177 Bom.)) = 2003-TIOL-188-HC-MUM-CX, and by the Gujarat High Court in Commissioner of Customs  Vs - Mahalaxmi Exports (2010 (258) ELT 217 (Guj.)) = 2009-TIOL-683-HC-AHM-CUS, which has been followed in various cases in Summerking Electricals Ltd. - Vs - CEGAT (1998 (102) ELT 522 (All.)), Parle International Ltd.  Vs - Union of India (2001 (127) ELT 329 (Guj.)) = 2003-TIOL-23-HC-AHM-CX and Commissioner of Central Excise, Chennai - Vs -Calcutta Chemical Company Ltd. (2001 (133) ELT 278 (Mad.)) and the said view has also been maintained by the Supreme Court in Union of India  Vs  Suvidhe Ltd. (1997 (94) ELT A159 (SC)). There are also very many judgments of various Courts, which have also reiterated the same principles that in case any amount is deposited during the pendency of adjudication proceedings or investigation, the said amount would be in the nature of deposit under protest and, therefore, the principles of unjust enrichment would not apply. In view of the catena of decisions, available on this issue, this Court answers the first substantial question of law against the Revenue and in favour of the assessee.

7. The learned DR Shri. Pakshi Rajan pleads that the case should be remanded back to the original adjudicating authority to examine into the principles of unjust enrichment. However there is no basis to remand the case back either to the original adjudicating authority or to the Commissioner (Appeals) when the Honble High Court of Madras has clearly held that the deposits made during investigation or adjudication proceedings of the department are in the nature of deposits made under protest and the principle of unjust enrichment is not applicable to the same.

8. In the light of above it is held that the appellant is entitled to the sanction of the refund of Rs. 17,13,033/- (Rupees Seventeen Lakhs Thirteen Thousand and Thirty Three only). Therefore it is hereby ordered that the said refund of Rs. 17,13,033/- (Rupees Seventeen Lakhs Thirteen Thousand and Thirty Three only) be paid to the appellant within six weeks from the day the application is filed by the appellant with the competent authority of the department. The appeal allowed in above terms.

(Order pronounced in open court)

(ASHOK KUMAR ARYA) TECHNICAL MEMBER

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