2 OIO No. 28/STC/AHD/ADC(JSN)/2013-14
BRIEF FACTS OF THE CASE
1. M/s. Gujarat State Road Transport Corporation (hereinafter referred as ‘GSRTC’), having its office at Vahan Vyavhar Bhavan, ST Central Office, Astodia, Ahmedabad-380022 (New address is GSRTC Central Work shop Compound, P.O. Saijpur Bogha, Ahmedabad-382345) is engaged in providing Services Advertising Space or Time, Courier service, Transport of goods by Road, Business Support Service, Rent-A-Cab having Service Tax Registration No.AAACG5587HST001.
2. M/s GSRTC had filed a refund claim of Rs. 24,21,125/- on 01-07-2011 to the Division-I, Service Tax, Ahmedabad stating non applicability of service tax on space provided by GSRTC to Shri Sai Marketing & Trading company on its buses.
3. On scrutiny of the refund claim filed by M/s GSRTC, it was observed by the adjudicating authority that the refund related to the period of 01-09-2007 to 31-05-2008, which was filed beyond the stipulated period as specified in Section 11B of the Central Excise Act, 1944 which has been made applicable to Service Tax vide Section 83 of the Finance Act, 1994. Accordingly, a Show cause notice F.No. SD-01/4-84/Refund/GSRTC/11-12 dated 10-08-2011 was issued by the Deputy Commissioner, Service Tax, Division-I, Ahmedabad to M/s GSRTC and the same was adjudicated vide Order-in-Original No. SD-01/Refund/18/DC/11-12 dated 29-09-2011, by the Deputy Commissioner, Service Tax, Division-I, Ahmedabad, The refund claim was rejected by the adjudicating authority vide above mentioned O.I.O on the ground that
(i) the clarification issued by the Director (Service Tax), CBEC vide letter F.No. 137/123/2010-CX-4 dated 09-05-2011 was not covered in any of the conditions of Section 11B of the Central Excise Act, 1944 vide and
(ii) (ii) the refund claim was hit by limitation as the same was not filed within the time limit of one year from the date of payment of Service Tax as required under Section 11-B of the Central Excise Act, 1944.
4. M/s GSRTC filed an appeal before the Commissioner (Appeals) against the Order-in-Original No. SD-01/Refund/18/DC/11-12 dated 29-09-2011 passed by the Deputy Commissioner, Service Tax, Division-I, Ahmedabad and the Commissioner(Appeals) allowed the appeal filed by M/s GSRTC by way of allowing the refund of Rs.24,21,125/- vide Order-in-Appeal No. 63/2012(STC)/K.Anpazhakan/Commr(A)/Ahd dated 21-02-2012.
5. As per Order-in-Appeal dated 21-02-2012, the refund claim was sanctioned for Rs. 24,21,125/- vide O.I.O No..SD-01/Refund/02/DC/GSRTC/12-13 dated 14-05-2012 by the Deputy Commissioner, Service Tax, Division-I, Ahmedabad.
6. The department vide committee of Commissioners decided to file appeal against the Order-in-Appeal No. 63/2012(STC)/K.Anpazhakan/Commr(A)/Ahd dated 21-02-2012 issued by the Commissioner(Appeal) on the grounds that;
(i)The Commissioner (Appeals), Central Excise, Ahmedabad erred in not appreciating the fact that the eventuality in which M/s GSRTC had claimed refund is not mentioned under Section 11B of the Central Excise Act, 1944. M/s GSRTC was discharging their liability to service tax voluntarily and had deposited the money with the Exchequer as “Service Tax”. M/s GSRTC had self assessed the ST-3 returns and these returns were finalized. Once the assessment on the returns is finalized, subsequently, it cannot give rise to refund unless the assessment is challenged. This is a well settled legal position. Reliance is placed on the judgment of the Honorable Supreme Court in the case of Collector of Central Excise, Kanpur V/s Flock (India) Pvt. Ltd. reported in 2000(1200 ELT 285(SC), wherein it is held by the Honorable Supreme Court in para 10 of the Order as under :-
“10. Coming to the question that is raised there is little scope for doubt that in a case where an adjudicating authority has passed an order which is appealable under the statute and the party aggrieved did not choose to exercise the statutory right of filing an appeal, it is not open to the party to question the correctness of the order of the adjudicating authority subsequently by filing a claim for refund on the ground that the adjudicating authority had committed an error in passing his order. If this position is accepted then the provisions for adjudication in the Act and the Rules, the provision for appeal in the Act and the Rules will lose their relevance and the entire exercise will be rendered redundant. This position in our view, will run counter to the scheme of the Act and will introduce an element of uncertainty in the entire process of levy and collection of excise duty. Such a position cannot, be countenanced. The view taken by us also gain support from the provision in sub-rule (3) of Rule 11 wherein it is laid down that where as a result of any order passed in appeal or revision under the Act, refund of any duty becomes due to any person, the proper officer, may refund, the amount to such person without his having to make any claim in that behalf. The provision indicates the importance attached to an order of the appellate or revisional authority under the Act therefore, an order which is appealable under the Act is not challenged then the order is not liable to be questioned and the matter is not to be reopened in a proceeding for refund which if we may term it so is in the nature of execution of a decree/ order. In the case at hand it was specifically mentioned in the order of the Assistant Collector that the assessee may file appeal against the order before the Collector (Appeals) if so advised.”
The reliance was also placed on the decision of Tribunal in the case of Cewat (India) Processors reported in 2011 (273) ELT 0412 (T) held that without challenging the assessment, the refund claims cannot be admitted. In the present case, the said service provider had not challenged the assessment of ST-3 returns, the refund claim has been filed due to budgetary changes which brought clarification from 01.05.2011. In this clarification, it is nowhere stated that the services of the nature provided by the said service provider erstwhile were not taxable. Reliance is placed on the decision of Tribunal in the case of Alstom Projects (India) Limited reported in 2011(023) STR 0489 (T) and in the case of Instrumentation Limited reported in 2011 (023) STR 0221 (T). Hence, when the assessment was final and the service tax was being voluntarily deposited, it cannot be considered as deposit of tax without authority of law. The refund claim filed by the said service provider is therefore unsustainable.
(ii)The Commissioner (Appeals) failed to pass a reasoned order by not giving any observations or having discussed, as to whether the said service provider was eligible for refund of Rs. 24,21,125/- in respect of Service paid under the category of Courier Agency Service.
(iii)The Commissioner (A) failed to appreciate that refund claim has been filed beyond a period of one year prescribed under Section 11B of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994. The provisions of section 11B of the Central Excise Act, 1944 reads as under.
Section 11B:
(1) Any person claiming refund of any duty of excise and interest, if any, paid on such duty may make an application for refund of such duty and interest, if any, paid on such duty to the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise before the expiry of one year from the relevant date in such form and manner as may be prescribed and the application shall be accompanied by such documentary or other evidence (including the documents referred to in section 12A) as the applicant may furnish to establish that the amount of duty of excise and interest, if any, paid on such duty in relation to which such refund is claimed was collected from, or paid by, him and the incidence of such duty and interest, if any, paid on such duty had not been passed on by him to any other person:
Provided further that the limitation of one year shall not apply where any duty and interest, if any, paid on such duty has been paid under protest.
(2) If, on receipt of any such application, the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise is satisfied that the whole or any part of the duty of excise paid by the applicant is refundable, he may make an order accordingly and the amount so determined shall be credited to the Fund:
Provided that the amount of duty of excise as determined by the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise under the foregoing provisions of this sub-section shall, instead of being credited to the Fund, be paid to the applicant, if such amount is relatable to—
(a) refund of duty of excise on excisable goods exported out of India or on excisable materials used in the manufacture of goods which are exported out of India;
(b) unspent advance deposits lying in balance in the applicant's account current maintained with the Commissioner of Central Excise;
(c) refund of credit of duty paid on excisable goods used as inputs in accordance with the rules made, or any notification issued, under this Act;
(d) the duty of excise and interest, if any, paid on such duty paid by the manufacturer, if he had not passed on the incidence of such duty and interest, if any, paid on such duty to any other person;
(e) the duty of excise and interest, if any, paid on such duty borne by the buyer, if he had not passed on the incidence of such duty and interest, if any, paid on such duty to any other person;
(f) the duty of excise and interest, if any, paid on such duty borne by any other such class of applicants as the Central Government may, by notification in the Official Gazette, specify:
Provided further that no notification under clause (f) of the first proviso shall be issued unless in the opinion of the Central Government the incidence of duty has not been passed on by the persons concerned to any other person.
Further, the relevant date as stated in section 11B reads as under:
Explanation.—For the purposes of this section,—
(A) "refund" includes refund of duty of excise on excisable goods exported out of India or on excisable materials used in the manufacture of goods which are exported out of India;
(B) "relevant date" means,—
a) in the case of goods exported out of India where a refund of excise duty paid is available in respect of the goods themselves or, as the case may be, the excisable materials used in the manufacture of such goods,—
(i) if the goods are exported by sea or air, the date on which the ship or the aircraft in which such goods are loaded, leaves India, or
(ii) if the goods are exported by land, the date on which such goods pass the frontier, or
(iii) if the goods are exported by post, the date of dispatch of goods by the Post Office concerned to a place outside India;
(b) in the case of goods returned for being remade, refined, reconditioned, or subjected to any other similar process, in any factory, the date of entry into the factory for the purposes aforesaid;
(c) in the case of goods to which banderols are required to be affixed if removed for home but not so required when exported outside India, if returned to a factory after having been removed from such factory for export out of India, the date of entry into the factory;
(d) in a case where a manufacturer is required to pay a sum, for a certain period, on the basis of the rate fixed by the Central Government by notification in the Official Gazette in full discharge of his liability for the duty leviable on his production of certain goods, if after the manufacturer has made the payment on the basis of such rate for any period but before the expiry of that period such rate is reduced, the date of such reduction;
(e) in the case of a person, other than the manufacturer, the date of purchase of the goods by such person;
(ea) in the case of goods which are exempt from payment of duty by a special order issued under sub-section (2) of section 5A, the date of issue of such order;
(eb) in case where duty of excise is paid provisionally under this Act or the rules made there under, the date of adjustment of duty after the final assessment thereof;
(ec) in case where the duty becomes refundable as a consequence of judgment, decree, order or direction of appellate authority, Appellate Tribunal or any court, the date of such judgment, decree, order or direction ;.
(f) in any other case, the date of payment of duty.
(iv) The clarification by the CBEC vide a letter bearing F.No. 137/123/2010-CX-4 dated 09.05.2011 on which the said service provider had mainly relied upon, does not cover any of conditions of Section 11B of the Central Excise Act, 1944 for relevant date.
(v)The said Service provider had to file refund claim within one year from the date of payment of service tax. In the instant case , the assessee has filed refund claim for the payment of service tax for the period from 16.11.207 to 07.6.2008. The assessee has filed the refund claim on 01.07.2011 i.e. after three years from the date of payment. Therefore, the refund claim filed by the assessee hit by time limit and not filed within time limit of one year as per Section 11B of Central Excise Act, 1944.
(vi)The Hon’ble Supreme Court of India in the case of Union Of India Vs Kirloskar Pneumatic Company [1996(84) ELT 401(S.C.)] has stated that
“The power conferred by Article 226/227 is designed to effectuate the law, to enforce the Rule of law and to ensure that the several authorities and organs of the state act in accordance with law. It cannot be invoked for directing the authorities to act contrary to law. In particular, the Customs authorities, who are the creatures of the Customs Act, cannot be directed to ignore or act contrary to Section 27, whether before or after amendment. May be the High Court or a Civil Court is not bound by the said provisions but the authorities under the Act are. Nor can there be any question of the High Court clothing the authorities with its power under Article 226 or the power of a civil court. No such delegation or conferment can ever be conceived”.