Case Law Details
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 18.08.2006 cannot be thrown out on the ground of limitation. The order of the Assistant Commissioner dated 08.11.2006 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 01.06.2007 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.
THE COMMISSIONER OF SERVICE TAX, CHENNAI
Vs
1. WARDES PHARMACEUTICALS PVT. LTD., CHENNAI
2. CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, CHENNAI
Dated: January 28, 2011
JUDGEMENT
Per: F M Ibrahim Kalifulla:
The Commissioner of Service Tax is the appellant. The challenge is to the order of the Tribunal dated 18.01.2008 passed in Final Order No.37 of 2008 = [2008-IST-111-CESTAT-MAD].
2. The issue relates to the refund of alleged service tax paid by the first respondent- assessee for GTO service availed by them during the period between 16.11.1997 and 01.06.1998.
3. The brief facts are that in the wake of Finance Act, 2000 providing for recovery of service tax on Goods Transport Operator (GTO) service from the availers of the service retrospectively, a notice dated 28.06.2002 was issued to the first respondent/ assessee demanding service tax of Rs. 2,15,463/- on GTO service availed by them for the period from 16.11.1997 to 01.06.1998 along with interest till the date of payment of service tax due.
4. The first respondent- assessee in its reply dated 15.07.2002 requested the Jurisdictional Assistant Commissioner of Service Tax to drop the further proceedings demanding service tax by relying upon a Clarificatory Circular dated 10.2.1998, in which the Government of India advised the authorities to keep the proceedings seeking to recover service tax from the Small Scale Industries Units in abeyance. Subsequently, based on the enactment of Finance Act, 2003, which inter alia made a retrospective Notification No.43/97-ST dated 05.11.1997, providing exemption to the small scale industries registered with State Government from payment of service tax with effect from 16.11.1997 to 01.06.1998. The said enactment by way of Finance Bill, 2003, came to be introduced on 14.05.2003. However, at the instance of the appellant, as per the communication of the Deputy Commissioner dated 05.11.2003, the respondent/ assessee had to make the payment before the last date i.e. on 12.11.2003 since the last date for filing the return was 13.11.2003.
5. The Assistant Commissioner of Service Tax passed its order dated 25.07.2006 ultimately dropping the further proceedings in respect of the demand for service tax on GTO services and also granting consequential relief subject to the provisions of Section 11B of the Central Excise Act, made applicable to service tax under Section 83 of the Finance Act, 1994. The said order made it clear that the first respondent/ assessee was a registered small scale industry with the State Government, which is excluded from payment of service tax as a GTO for the period from 16.11.1997 to 01.06.1998 as per the amended provision of the Notification No.43/97 dated 05.11.1997. The copy of the permanent certificate issued by the State Government was accepted by the Assistant Commissioner. Subsequently, the first respondent/assessee made a claim for refund in its application dated 18.08.2006. By order dated 08.11.2006, the Assistant Commissioner allowed the refund of Rs. 2,15,463/- in exercise of powers under Section 11B of the Act.
6. However, the Commissioner of Service Tax suo motu exercised its power under Section 84 of the Finance Act, 1994, called for the records and after issuance of notice to the first respondent, by its order dated 01.06.2007 set aside the order of the Assistant Commissioner dated 08.11.2006 and ordered for the recovery of refund together with interest at the applicable rate from the date of payment till the date of recovery.
7. The first respondent/ assessee appealed against the said order before the CESTAT and by the order impugned, the Tribunal rejected the stand of the appellant that the claim of the first respondent/ assessee was barred by limitation as well as on other grounds and set aside the order of the Commissioner, as against which the appellant has come forward with the present appeal.
8. We heard Mr. Yashwanth, learned standing counsel for the appellant and Mr. N. Viswanathan, leaned counsel for the first respondent at the admission stage itself and the learned standing counsel in his submissions vehemently contended that the question of limitation is substantial question of law that arises for consideration in this appeal while challenging the order of the Tribunal and insisted for entertainment of this appeal. However, on hearing the learned standing counsel for the appellant as well as the counsel for the first respondent- assessee and after perusing the material papers including the orders of the Assistant Commissioner, the Commissioner as well as the Tribunal, we do not find any scope to entertain this appeal.
9. The only question of law that the appellant seeks to raise is on the ground of limitation. There is no question of law sought to be raised on other aspects dealt with by the Tribunal. While examining the issue relating to the limitation, as noted by us earlier, the first respondent/ assessee did not deposit the service tax on its own for the period in question, namely, 16.11.1997 to 01.06.1998. For the first time when notice was issued at the instance of the appellant on 28.06.2002, the first respondent/ assessee submitted its reply on 15.07.2002 wherein the respondent by making a specific reference to a clarificatory circular dated 10.02.1998, wherein the Government of India requested the appellant to keep the proceedings initiated through its show cause notice dated 28.06.2002 in abeyance. The said stand was taken by the respondent/ assessee on the footing that it was a small scale industry unit duly registered with the State Government and the scope of grant of exemption for such small scale industry unit was under consideration by the Government of India as was disclosed in the Circular dated 10.02.1998. In fact, on 14.05.2003 when the Finance Act, 2003, came to be enacted, the exemption in respect of SSI units registered with the State Government from payment of service tax as GTO for the period between 16.11.1997 to 01.06.1998 came to be granted. Unfortunately, irrespective of the said exemption having been brought into effect, a further demand came to be raised at the instance of the appellant on 05.11.2003, directing the respondent/ assessee to make the payment by way of service tax for the very same period. Since it is stated that 13.11.2003 was the last date for making the payment, the respondent/ assessee was forced to make the payment on 12.11.2003.
10. The above facts are found in the findings recorded by the Commissioner in its order dated 01.06.2007. 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 18.08.2006 cannot be thrown out on the ground of limitation. The order of the Assistant Commissioner dated 08.11.2006 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 01.06.2007 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.
