Case Law Details
Oil India Limited Vs Commissioner of Central Tax (CESTAT Hyderabad)
Refund jurisdiction of the Officers of Central Excise and Service Tax emanates from Section 12E and Section 11B of Central Excise Act, 1944 and Section 83 of the Finance Act, 1994. The powers of the first appellate authority to decide appeals or such decisions emanates from Section 35 of the Central Excise Act, 1944. Clearly, the Officers have no jurisdiction to decide matters which fall beyond the scope of the law itself. In such cases, the appropriate legal remedy as held by Hon’ble Apex Court is Civil Suit under Section 72 of the Contract Act and the Officers have no jurisdiction to decide on such Civil Suits. In the present case, I find that the contractor has already paid the service tax and the appellant was not liable to pay service tax under reverse charge mechanism but has wrongly paid so. Under these circumstances, I find that payment of the amount as representing service tax is beyond the scope of Finance Act 1994 and therefore no provisions of the Acts including Section 11B and the period of limitation therein or the jurisdiction of the Officers to sanction refund claim applies to the present case.
FULL TEXT OF THE CESTAT JUDGMENT
This appeal is filed against Order-in-Appeal No. VIZ-EXCUS-002-APP- 043-18-19, dated 11.05.2018. After hearing both sides and perusal of records, it emerges that the appellant is engaged in the business of exploration of mineral oil and natural gas. During the relevant period, they availed services of M/s B.J. Services in relation to drilling of exploratory wells. M/s BJ Services discharged appropriate service tax to the department. However, on the same services, the appellant also paid service tax under reverse charge mechanism to the extent of Rs.20,43,584/- under various challans dated 07.08.2014, 16.08.2014 and 30.09.2014. Realising that they have paid service tax wrongly, the appellant informed the Department on 27.07.2015 and thereafter filed a refund claim under section 11B as made applicable to service tax by Section 83 of the Finance Act, 1994 on 12.07.2016. A show cause notice was issued to the appellant asking why the refund was filed after one year from the date of payment of service tax should not be rejected. After due process of law, the lower authority rejected the refund claim as being time barred. This rejection was upheld by the first appellate authority vide the impugned order. Hence, this appeal.
2. Ld. Counsel for the appellant submits that the assessee paid service tax under mistake of law and therefore the limitation under section 11B should not apply as has been held by various High Courts and this Bench in the case of GMR Vemagiri Power Generation Limited [2018(11)TMI 231-CESTAT-HYD], Karvy Investor Services Limited [2016(43)S.T.R. 610 (Tri.-Hyd.)] National Institute of Public Finance and Policy [2019(20)G.S.T.L. 330 (Del.)] and 3E Infotech [2018(18)G.S.T.L. 410 (Mad.)]. Ld. Counsel would argue that what is not due to the Government, cannot be retained by them and the refund application cannot be rejected on the ground of limitation when the amount was paid under mistake of law which is squarely their case. They were not liable to pay service tax but under mistake they have paid the same and therefore the department cannot reject refund on the ground of limitation under Section 11B. He would argue that what was paid was not service tax at all although it was wrongly paid as service tax. It was just an amount deposited in the exchequer because no service tax was not leviable on them. In view of the above and the case laws relied upon, she would urge that the service tax paid by them may be refunded ignoring the fact that the refund claim under Section 11B was filed after a period of one year which is beyond the limitation under that section.
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