Case Law Details
Manoj Vijay Vs Commissioner Central Goods And Service Tax (CESTAT Delhi)
Since post July 01, 2017, the applicability of Rule 6 (4A) of Central Excise Rules was no more available to the appellant, the excess amount already got deposited by the appellant at the time when Service Tax liability for the said quarter had not even accrued towards the appellant, but remain unutilised for any tax liability till 30.06.2017, the amount cannot qualify for being called tax. The said balance was appellant’s own money and Department cannot be allowed to get unjustly enriched out of said money. Seeing from this angle as well and in view of the above discussion, it is held that there can be no applicability of bar of limitation of Section 11B of Central Excise Act, to the amounts lying with Department but as assessee’s I hold that learned Commissioner (Appeals) has erred while invoking bar of limitation of one year as mentioned under section 11B for the amount which was not duty or tax. Learned Commissioner (Appeals) is also held to have erred while invoking the clause (f) of the definition of ‘relevant date’ as given under section 11B. Since the amount in question was not duty, date of payment of duty clause cannot apply and date of impugned deposit cannot be taken as relevant date.
FULL TEXT OF THE CESTAT DELHI ORDER
Present appeal has been filed to assail the order in appeal No. 392(CRM)/ST/JPR/2019 dated 25.10.2019. The relevant factual matrix for the adjudication of this appeal is as follows:
That the appellant is registered under the Service Tax as it is engaged in providing the taxable service. A refund claim of Rs.1,51,404/- was filed by the appellant for the reason that the aforesaid amount has been paid by the appellant in excess of the amount as was to be paid for the Service Tax liability of the appellant for the period of April, 2017 to June, 2017. Initial payment for the aforesaid quarter was made during 11.4.2017 to 24.4.2017. However, the Service Tax Return for the said quarter was filed on 15.8.2017. Since with effect from 01.07.2017 provisions of GST Act came into operation under which law the appellant was no more entitled to have the similar arrangement of adjusting the excess payment towards his future liability as was available under Rule 6 (4A) of Central Excise Act, 1944. Accordingly, the aforesaid refund was filed. However, vide Show cause Notice No. 9687 dated 24.08.2018 refund was proposed to be rejected as it has not been filed within one year from 24.4.2017. The said proposal was rejected initially vide Order in Original No. 10034 dated 10.9.2017. The appeal thereof as was filed by the appellant has been rejected vide Order under challenge. Still being aggrieved the appellant is before this Tribunal.
2. I have heard Mr. Pankaj Malik, learned Counsel appearing for the appellant and Shri Pradeep Gupta, learned Departmental Representative for the Department.
3. It is submitted on behalf of the appellant that the appellant was making the excess payment as same was to be adjusted for his future liability. It is submitted that Rule 6(4A) of Service Tax Rules, 2004 permits the same. It is further submitted that for the period April, 2017 to June 2017, the appellant had opening balance of Service Tax of Rs. 2,85.501/-. However, the said amount exceeded the total liability of Service tax payable by the appellant for the aforesaid period of an amount of Rs.1,51,404/-. Since the said amount could not be utilised for the future liability because the aforesaid provisions being repealed by the GST Act, that the refund has rightly been filed. It is further submitted that the said excess came to the notice of the appellant only at the time of filing the return on 15.08.2017. Hence, the relevant date for invoking the period of limitation shall reckon from 15.08.2017 instead of 24.04.2017 (date of payment of the total amount). In addition, it is submitted that the amount in question was in excess of Service tax liability, hence the said excess was the money of the appellant lying in Departments’ account to be utilised for future liability. Since no services were provided by the appellant post June 30, the question of service tax liability of the appellant does not arise. Accordingly, the said amount cannot be considered as tax and the bar of limitation under section 11B cannot be fastened towards the said amount. Order under challenge is alleged to have wrongly been invoked. Section 11B B(f) of Central Excise Act, 1944, which is applicable to the Service Tax as well. Order accordingly, prayed to be set aside and appeal prayed to be allowed.
4. While rebutting these arguments, learned Departmental Representative has impressed upon Para 9 of the judgement where Commissioner (Appeals) has recited the definition of ‘relevant date’ in terms of sub clause (f) of Section 11(B) of the Central Excise Act from which the period of one year as mentioned in section 11B of Central Excise Act has to be reckoned is the date of payment of It is further submitted that there is no infirmity in the order of Commissioner (Appeals)where he has formed the opinion that the excess amount since has been reflected in ST-3 return, it is obvious that the same is Service tax and not the deposit. The appeal accordingly, prayed to be dismissed.
5. After hearing both the parties and keeping in view the rival contentions as well as the record of the present appeal, I observe and hold as follows:
6. There is no denial of the fact that appellant had made payment for his service tax liability for the quarter ending April, 2017 to June, 2017 in April itself.Certain amount i.e. Rs.2,85.501/- was paid to be adjusted towards his total liability to be incurred during this quarter. There is also no denial that the entire liability of the appellant for this quarter was for Rs. 1,41,714/- which stand adjusted by the Department as the Service Tax being paid by the appellant for the period of April, 2017 to June, 2017 but out of the payment made from 11.4.2017 to 24.4.2017. Admittedly, Rs.1,51,404/- remained the balance to be adjusted for the service tax liability of appellant as may occur after quarter ending on 30.06.2017. These admitted facts are sufficient for me to hold that the amount in question was not at all tax liability of the appellant. Hence, question of applicability of section 11B of Central Excise Act specially bar of limitation incorporated therein is not opined to be applicable to the given facts and circumstances. I draw my support from the decision of Tribunal Mumbai in the case of Fluid Controls Pvt. Ltd. vs CCE, Pune 1 reported in 2018 (364) ELT 1041 (Tri-Mum)].
7. Though Hon’ble High Court of Mumbai in the case of Parijat Construction vs. Commissioner of Central Excise, Nashik reported in [2018 (9) SGSTL 8 (Bom)] wherein it has been held that limitation prescribed under section 11B of the Central Excise Act, 1944, is applicable to refund claim of Service Tax irrespective of the tax is made under mistake of law. In the present case, it was not at all the deposit of excess tax under the mistake of law. Admittedly it was usual practice of depositing excess amount to be debited towards the future tax liability in terms of Rule 6 (4A) of Central Excise Rules, which reads as follows:
“[Notwithstanding anything contained in sub-rule (4), where an assessee has paid to the credit of Central Government any amount in excess of the amount required to be paid towards service tax liability for a month or quarter, as the case may be, the assessee may adjust such excess amount paid by him against his service tax liability for the succeeding month or quarter, as the case may be.”
8. Since post July 01, 2017, the applicability of this Rule was no more available to the appellant, the excess amount already got deposited by the appellant at the time when Service Tax liability for the said quarter had not even accrued towards the appellant, but remain unutilised for any tax liability till 30.06.2017, the amount cannot qualify for being called tax. The said balance was appellant’s own money and Department cannot be allowed to get unjustly enriched out of said money. Seeing from this angle as well and in view of the above discussion, it is held that there can be no applicability of bar of limitation of Section 11B of Central Excise Act, to the amounts lying with Department but as assessee’s I hold that learned Commissioner (Appeals) has erred while invoking bar of limitation of one year as mentioned under section 11B for the amount which was not duty or tax. Learned Commissioner (Appeals) is also held to have erred while invoking the clause (f) of the definition of ‘relevant date’ as given under section 11B. Since the amount in question was not duty, date of payment of duty clause cannot apply and date of impugned deposit cannot be taken as relevant date.
9. In view of the above discussion, order under challenge is therefore, hereby set aside.
10. The appeal stands allowed.
