M/s MDP Infra (India) Pvt. Ltd. Versus Commissioner, Customs, Central Excise & CGST
Service Tax
2019 (2) TMI 208 – MADHYA PRADESH HIGH COURT – [2019] 65 G S.T.R. 51 (MP), 2019 (29) G. S. T. L. 296 (M. P.)
MADHYA PRADESH HIGH COURT – HC
Dated:- 14-1-2019
C.E.A. No. 123/2018
Service Tax
Sanjay Yadav And Vivek Agarwal JJ.
For the Appellant : Shri Gautam Prasad Sharma, learned counsel with Ms. Smrati Sharma, learned counsel
For the Respondent : Shri Praveen Surange, learned counsel
ORDER
This appeal under Section 35G(1) of the Central Excise Act, 1944 is directed against the final order No. A/51822/2018-SM(BR) dated 14/05/2018 passed by the Customs, Excise and Service Tax Appellate Tribunal, whereby, the Tribunal has upheld the rejection of application for refund claim of Rs. 25,49,317/-, by the Assistant Commissioner, Service Tax, Division Gwalior by his order dated 15/06/2017.
The appellant holds service tax registration and paying service tax under the categor
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truction of Model School Building at Pahadgarh for PWD, PIU Division-4, Gwalior (Department of Government of Madhya Pradesh) work order No: 02/2012-13 dated 15.06.2012, E-tender No. 14209 and office No. 1601 dated 02.11.2012.
(vi) Construction of Boundary wall at National Law Institute University, a university established by State Legislature of Madhya Pradesh, Bhopal vide ref. no. by act No. 41 of 197, Letter Ref. No. 83/ NLIUB dated 23.01.2015.”
That prior to 01/04/2015, the appellant was availing exemption for civil works related to State and Union Government establishments used for administrative purpose. The exemption was availed under notification No. 12/2012 and 25/2012 dated 20/06/2016. As the notification dated 20/06/2012 was withdrawn w.e.f. 01/04/2015, the exemption from service tax on the nature of work the appellant engaged in was not available; therefore, he paid service tax with interest for the period 01/03/2015 to 30/09/2015.
The exemption was later on restored vid
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llation, completion, fitting out, repair, maintenance, renovation or alteration of
(a) a civil structure or any other original works meant predominantly for use other than for commerce, industry or any other business or profession;
(b) a structure meant predominantly for use as
(i) an educational establishment;
(ii) a clinical establishment; or
(iii) an art or cultural establishment;
(c) a residential complex predominantly meant for self-use or for the use of their employees or other persons specified in Explanation 1 to clause (44) of section 65B of the said Act, under a contract entered into before the 1st day of March, 2015 and on which appropriate stamp duty, where applicable, had been paid before that date.
(2) Refund shall be made of all such service tax which has been collected but which would not have been so collected had sub-section (1) been in force at all material times.
(3) Notwithstanding anything contained in this Chapter, an application for the claim of
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from time to time, shall apply, so far as may be, in relation to service tax as they apply in relation to a duty of excise : 9, 9A, 9AA, 9B, 9C, 9D, 9E, 11B, 11BB, 11C, 12, 12A, 12B, 12C, 12D, 10(12E, 14, 15, 31, 32, 32A to 32P (both inclusive), 33A, 34A,35EE,35F], 11 (35FF) to 35O (both inclusive}, 35Q, 12[35R,] 36, 36A, 37A, 37B, 7C, 37D 13[38A] and 40″.
Accordingly, the Word(S) 'duty of excise' or 'duty', shall mean 'Service Tax', the word 'manufacture' shall mean 'Service Provider', the word 'buyer' shall mean 'Service receiver'. (Except Under Section 12 B) and 'goods', shall mean 'Service' whenever they appear Under the Section of Central Excise Act, 1944 and circular/ Clarification, issued in this regard, which will be quoted referred or discussed in this Show Cause Notice.
Further, the word 'Act' appearing in Section 12B of the Central Excise Act, 1944 shall mean 'Finance Act, 1944', and
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he Central Excise Act, 1944 provides that if the Assistant Commissioner or Deputy Commissioner of Central Excise is satisfied that the whole or any part of the duty paid by the applicant is refundable, he may make an order accordingly and the amount so determined shall be credited to the 'Consumer Welfare Fund' except is excipiendis. However Sub Section (f) of the Section 11B provides that if the duty of excise borne by the buyer and if he had not passed on the incidence of such duty to any other person then the amount shall be paid to such buyer.
Explanation annexed to Section 11B defined the 'relevant date' for the purpose of reckoning time period within which refund claim is to be filed. This date is the date of purchase of 'goods' in the case of claimed is other than the 'manufacture'.
3. And whereas the refund claim was received on 24.03.2017 therefore the service tax and interest deposited during the period of 01/03/2015 to 30/09/2015 through c
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tored the exemption granted under Notification No.25/2012 ST dated 20.06.2012 as amended by Notification No.9/2016-ST 01.03.2016 for the services provided under a contract which had been entered into prior to 01.03.2015 and on which appropriate stamp duty, where applicable had been paid prior to that date. The services provided during the period from 01.04.2015 to 29.02.2016 under such contracts are also exempted from service tax, even if service is provided after 01.04.2015. If service tax was paid, refund has to be granted. The noticee has complied all the terms and conditions as stipulated in the Notification. Noticee has paid the service tax on the aforesaid tender/ work order and because of withdrawn of exemption by the government w.e.f. 01.03.2015 there was delay in payment of service tax and the noticee has paid the interest of Rs. 57716/- and has applied for refund of the said amount of service tax with interest. And that the notification for restoration of exemption was issued
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the appellant, the department has no authority to withhold the same on the ground of limitation. It was stated that the provisions of Section 11B of 1944 Act would get attracted when there is a liability and excess duty/ tax is deposited and later on the refund of such excess amount is sought. It was stated that being exempted, the appellant was not liable to pay the service tax. Therefore, the amount received by the department was not towards the tax as would be governed by the provisions of Section 11B. It was urged that even if it is then the period of limitation prescribed being one year and since notification for restoration of exemption was issued on 01/03/2016 and the appellant had filed the refund claim on 24/03/2017, the same should have been allowed.
The appeal was, however, dismissed on 28/09/2017 by Commissioner (Appeals), on the findings:-
“7. To put the legal position in proper prospective, I may mention that initially the mega exemption notification No. 25/2012-ST gra
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ays inclusive), in respect of taxable services provided to the Government, a local authority or a Governmental authority, by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation or alteration of
(a) a civil structure or any other original works meant predominantly for use other than for commerce, industry or any other business or profession;
(b) a structure meant predominantly for use as
(i) an educational establishment;
(ii) a clinical establishment; or
(iii) an art or cultural establishment;
(c) a residential complex predominantly meant for self-use or for the use of their employees or other persons specified in Explanation 1 to clause (44) of section 65B of the said Act, under a contract entered into before the 1st day of March, 2015 and on which appropriate stamp duty, where applicable, had been paid before that date.
(2) Refund shall be made of all such service tax which has been collected but which woul
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to some how claim the refund from the department they have arbitrarily calculated the time limitation of one year from the month of issuance of the said notification. They have also deliberately avoided any mention of section 102 inserted vide Finance Act 2016 which would have exposed and undetermined their refund claim as the same was clearly time barred.”
On further appeal, the Tribunal vide impugned order affirmed the order rejecting refund claim. The Tribunal taking into consideration the stipulations contained under Section 102 of the Finance Bill 2016 prescribed specific period of limitation of six months from the date of the assent of the President (which being 14.05.2016) for refund. And that the appellant applied for refund on 24/03/2017, i.e., with a delay of 131 days, dismissed the appeal observing:-
“8. Having carefully heard the submissions of both the sides, I find that there is no dispute on the facts. The retrospective exemption having been granted by the legislativ
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before the Revenue authorities.”
The appellant has proposed the following substantial questions of law:-
“(A) Whether on facts and in the circumstances of the case and in law, an amount paid under the mistaken belief that the service is liable to service tax when the same is actually exempt, be considered as service tax paid?
(B) Whether on facts and in the circumstances of the case and in law, the Tribunal was justified in rejecting appellant's refund claim as time barred without appreciating the fact that delay in filing the refund claim was beyond the control of the appellant inasmuch as the construction service covered in the refund claim is actually exempt of service tax was itself disputed by the authorities as the same was under investigation?
(C) Whether service tax paid mistakenly under construction service although actually exempt, is payment made without authority of law?”
As regard to substantial questions of law as proposed at 'A', we are not commended
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it was prospective in effect, the appellant was not entitled for any exemption, which the appellant was aware of and with open mind and eyes deposited the service tax due with interest. It was only by virtue of subsequent legislation the notification was made effective from retrospective date with the stipulations that refund can be claimed within specific time provided. There was thus no ambiguity nor any dispute as would have prevented the appellant from seeking refund within the period of limitation. On these given facts the substantial question at 'B' also does not arise for consideration.
As regard to substantial question 'C', the contention that the service tax was paid mistakenly is also not borne out from the facts.
The decisions relied upon by the appellant in Commr. Of C.Ex. (Appeals), Bangalore Vs. KVR Construction [Writ Appeal No. 2992-2993 of 2009 (Karnataka High Court)], CC&ST Vs. H.K. Dave Ltd. [(2015) 38 STR 77], Wazir Singh Swaran Singh Consignment S
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