2019 ACR 752 CESTAT Chennai
M/s. Tamilnadu Ex-servicemen’s Corporation Limited
Vs
The Commissioner of G.S.T. and Central Excise,
Chennai South Commissionerate
HON’BLE MR. P. DINESHA, MEMBER (JUDICIAL)
Service Tax Appeal No. 41526 of 2019 Final Order 41638/2019 dated 04.12.2019
(Arising out of Order-in-Appeal No. 173/2019 (CTA-II) dated 20.06.2019 passed by the Commissioner of G.S.T. & Central Excise (Appeals-II), Newry Towers, 2054/1, II Avenue, 12th Main Road, Anna Nagar, Chennai – 600 040)

Note –

The appellant has placed on record the Minutes of Board Meeting of the appellant-corporation held on 28.09.2011 wherein the Board had resolved to pay the Service Tax amount under protest. There is nothing on record nor in the pleadings of the appellant that the same was furnished before the lower authorities. Also, the said document has not at all been discussed anywhere in the orders of both the lower authorities. This assumes importance especially in the light of the fact that the payment appears to have been made not during investigation, but post Order-in-Original but pending adjudication of the first appeal.

There is Board resolution – obviously voluntary, though the word “protest” is used, but nevertheless, the fact remains that the tax was paid to arrest interest. In any case, filing of appeal itself is enough to indicate that the duty was paid under protest.

Further, the Hon’ble jurisdictional High Court in the case of M/s. 3E Infotech has categorically held that even when Service Tax was paid under mistake of law, the period of limitation cannot be invoked to deny the refund.

In the light of jurisdictional High Court decisions which are binding on this Tribunal at Chennai, the same are required to be followed here.

Present:

Shri. Rabeen Jayaram, Advocate for the Appellant

Ms. K. Komathi, Authorized Representative (A.R.) for the Respondent

 

ORDER

The only dispute involved in this appeal is the denial of refund under Section 11B of the Central Excise Act, 1944 on the ground that the claim of the appellant was barred by limitation.

2.1 Rabeen Jayaram, Ld. Advocate appearing for the assessee-appellant, submitted inter alia that the appellant was rendering services under the category of Security Agency, Manpower Service and Maintenance and Repair Service; that they had received a commission of Rs. 21,01,689/- towards the maintenance of one helicopter by the Government of Tamil Nadu; that the activity of the appellant was considered as a service under “Business Auxiliary Service” and accordingly, a Show Cause Notice dated 27.02.2009 was issued and the demand was also confirmed in the Order-in-Original No. 29/2009 dated 26.08.2009; that an appeal was filed and pending appeal adjudication, the appellant thought it fit  to pay the tax to save interest/penalty; that in appeal,  Ld. First Appellate Authority vide Order-in-Appeal No. 79/2013 (M-ST) dated 19.02.2013 set aside the demand by holding that there was no Business Auxiliary Service, but that the activity was only “Management, Maintenance or Repair Service”; that in the meantime, the appellant which had deposited the disputed tax on 29.10.2011 in order to save the interest, sought for refund of the same vide refund application dated 27.03.2017, etc.

 

2.2 Advocate also submitted that the payment towards duty itself was made under protest and therefore, the bar of limitation would not apply. Accordingly, he relied on the following decisions-

(i) Crop Chemicals (India) Ltd. Vs. C.C.E., Chandigarh – 2014 (308) E.L.T. 594 (Tri. –Del );

(ii) Radiators Ltd. Vs. C.C.E., Ludhiana – 2004 (10) T.M.I. 158 – CESTAT, New Delhi;

(iii) Hutchison Max Telecom Pvt. Ltd. Vs. C.C.E., Mumbai – 2004 (1) T.M.I. 114 – CESTAT, New Delhi;

(iv) Ind. Swift    Lands    Ltd.    Vs.    Commr.    –    (2017)     78 taxmann.com 209 (P & H).

 

2.3 He also placed reliance on the following decisions of the Hon‟ble High Court of Judicature at Madras, viz. :

(i) Commr. of S.T., Chennai Vs. Wardes Pharmaceuticals Pvt. Ltd. – 2011 (22) S.T.R. 274 (Mad.);

(ii) C.C.E., Coimbatore Vs. Pricol Ltd. – 2015 (39) S.T.R. 190 (Mad.);

(iii) 3E Infotech Vs. CESTAT, Chennai – 2018 (18) G.S.T.L. 410 (Mad.)

to contend that the appellant is entitled to the refund.

3.1 Per contra, Ms. K. Komathi, Ld. Departmental Representative appearing for the Revenue, seriously opposed the contentions of the Ld. Advocate for the appellant and contended that the claim of the appellant was hopelessly barred by limitation inasmuch as the cause of action having arose in 2013 for the deposit made in 2011, the refund has been claimed in 2017, for which the appellant has not at all offered any explanation.

3.2 She further contended that the taxing statute has to be strictly construed, and relied on the ratio of the Hon‟ble Apex Court in the case of M/s. ALD Automotive Pvt. Ltd. Vs. Commercial Tax Officer reported in 2018 (364) E.L.T. 3 (S.C.). Ld. Departmental Representative also relied on the following decisions:

(i) JSW Dharmatar Port Pvt. Ltd. Vs. Union of India – 2019 (20) G.S.T.L. 721 (Bom.);

(ii) Essar Bulk Terminal Salaya Ltd. Vs. Union of India – 2019 (25) G.S.T.L. 521 (Guj.)

in her support. She thus pleaded that the impugned order does not call for any interference.

  1. I have heard the rival contentions, gone through the documents placed on record and also various decisions relied on by both the sides.

5. On going through the Appeal Memorandum, I find that the appellant has placed on record the Minutes of Board Meeting of the appellant-corporation held on 28.09.2011 wherein the Board had resolved to pay the Service Tax amount under protest. There is nothing on record nor in the pleadings of the appellant that the same was furnished before the lower authorities. Also, the said document has not at all been discussed anywhere in the orders of both the lower authorities. This assumes importance especially in the light of the fact that the payment appears to have been made not during investigation, but post Order-in-Original but pending adjudication of the first appeal.

 

  1. The decision of the Hon‟ble Supreme Court in the case of M/s. ALD Automotive Pvt. Ltd. (supra) relied on by the Revenue deals with the mandatory requirement of Section 19 (11) of the Tamil Nadu Value Added Tax Act, 2006, which provides for claiming input tax credit, which is not like a refund under Section 11B impugned herein.

 

7.1 In the decision in the case of M/s. Wardes Pharmaceuticals Pvt. Ltd. (supra), the Hon‟ble jurisdictional High Court has answered as to what constituted payment made under protest, in the following manner :

 

“10. The above facts are found in the findings recorded by the Commissioner in its order dated 1-6-2007. A conspectus consideration of the above facts only go to show that the payment made by the first respondent/assessee was not voluntary and was forced to make the said payment. In such circumstances, the said payment can only be construed as one made under protest. When once the said conclusion based on the above facts are inevitable, then the second proviso to sub-section (1) of Section 11B of the Central Excise Act, automatically comes into play. Therefore, the conclusion of the Tribunal in having held that the first respondent made the payment under protest was well justified and the order of the Tribunal in holding that the application made by the first respondent/assessee for refund of the payment made in its application dated 18-8-2006 cannot be thrown out on the ground of limitation. The order of the Assistant Commissioner dated 8-11-2006 in having allowed the refund of Rs. 2,15,463/- under Section 11B of the Act was, therefore, perfectly in order and the order of the Tribunal in setting aside the order of the Commissioner dated 1-6-2007 cannot be called in question. Inasmuch as the above conclusions of the Tribunal were made based on relevant considerations of the claim of the respondent/assessee and were based mainly on facts relating to the first respondent-assessee, we do not find any question of law, much less substantial question of law to be entertained in this appeal. We, therefore, do not find any merits to entertain this appeal. The appeal fails and the same is dismissed. No costs. Consequently, M.P. No. 1 of 2010 is also dismissed.”

 

The same may not apply here since, there is Board resolution – obviously voluntary, though the word “protest” is used, but nevertheless, the fact remains that the tax was paid to arrest interest. In any case, filing of appeal itself is enough to indicate that the duty was paid under protest.

 

7.2 Further, the Hon‟ble jurisdictional High Court in the case of M/s. 3E Infotech (supra) has categorically held that even when Service Tax was paid under mistake of law, the period of limitation cannot be invoked to deny the refund.

 

  1. In the light of jurisdictional High Court decisions which are binding on this Tribunal at Chennai, the same are required to be followed here over non-jurisdictional High Court decisions.
  2. In view of the above, the appeal is allowed with consequential benefits, if any, as per law.

 

(Order pronounced in the open court on 04.12.2019)