CESTAT, BANGALORE BENCH
Ambience Constructions India Ltd.
Commissioner of Service Tax, Hyderabad
FINAL ORDER NO. 699 OF 2012
APPEAL NO. ST/2266 OF 2010
OCTOBER 25, 2012
1. In this appeal filed by the assessee, the short question to be considered is whether their claim of refund of Rs. 1,20,218/- which was filed on 28.01.2009 is hit by limitation or not. The appellant has waived personal hearing.
2. The appellant had paid service tax on renting of various immovable properties during the material period. An amount of Rs. 1,20,218/- was paid on 16.01.2008 towards service tax on renting of an immovable property for boarding and lodging for the period from September to December 2007. Refund of this amount was claimed on 28.01.2009 on the ground that such tax was not liable to be paid by virtue of Explanation 1 (d) to Section 65 (105) (zzzz) of the Finance Act 1994. The original authority rejected this claim, against which the claimant preferred an appeal to the Commissioner (Appeals). The appellate authority held that the refund claim was time-barred. Against this decision the appellant has contended that as the service tax was paid by mistake of law Section 11B of the Central Excise Act is not applicable to the refund claim. The appellant has claimed support from certain decisions noted below:
(1) Hexacom (I) Ltd. v. CCE 2003 (156) E.L.T. 357 (Tri.-Delhi.)
(2) CCE v. Indian Ispat Works (P) Ltd.  7 STT 319 (NewDelhi-Cestat)
(3) CCE v. M.A. Financial Services (P.) Ltd. [Order No. A/772/Kol./2005, dated 25-10-2005]
(4) Hind Agro Industries Ltd. v. Commissioner of Customs 2008 (221) E.L.T. 336 (Delhi)
3.1 Per contra, the learned Superintendent (AR) submits that all refund claims under the Finance Act 1994, except any claim arising out of statutory provisions having been declared unconstitutional, must confirm to the requirement of section 11B of the Central Excise Act read with section 83 of the Finance Act 1994. In the instant case, refund of service tax paid by mistake of law should have been claimed within the period of limitation prescribed under section 11B. In this connection, reliance is placed on the following decisions:
(1) Kerala State Electricity Board v. Asstt.Collector of Central Excise.2002 (144) E.L.T. 302 (Ker.).
(2) Mysore Leasing & Finance Ltd. v. CCE, C&ST [2008 16 STT 479 (Bang. – CESTAT).
3.2 The learned Superintendent (AR) has endeavoured to distinguish the cases relied on by the appellant. It is submitted that, in the case of Hexacom (I) Ltd., (supra) the issue considered by the Tribunal was not one of limitation. In the case of Indian Ispat Works (P) Ltd., the cause of action for refund arose on account of the retrospective amendment of an exemption notification by section 160 of the Finance Act 2003. In the case of Hind Agro Industries Ltd. (supra), refund was claimed of an amount which was not recognized as a payment made under the Customs Act and accordingly section 27 of that Act was held inapplicable. The learned Superintendent (AR) has therefore argued that the case law cited by the appellant cannot be applied to the instant case.
4.1 I have given careful consideration to the submissions. As per Section 65 (105) (zzzz) of the Finance Act 1994,”taxable service” means any service provided or to be provided to any person, by any person in relation to renting of immovable property for use in the course or furtherance to business or commerce. Explanation 1 of’ this definition reads as follows:
For the purpose of this sub-clause, “immovable property” includes
(i) to (iv)** ** **
But does not include –
(a) to (c)** ** **
(d) Building used solely for residential purposes and buildings used for the purposes of accommodation, including hotels, hostels, boarding houses, holiday accommodation, tents, camping facilities”
The service tax in question was paid, admittedly, on renting of immovable property for a hotel, which property was expressly excluded from the definition of the term “immovable property” used in the definition of “taxable service”. Therefore it is not in dispute that the appellant was not liable to pay service tax amounting to Rs. 1,20,218/-. Nevertheless they paid the tax which happened, admittedly; by mistake of law. The immediate question to be considered is whether, on this ground refund of the tax could be claimed without the bar of limitation. According to the appellant, refund of any amount of duty or tax paid by mistake of law can be claimed without the bar of limitation. According to the learned Superintendent (AR), this privilege cannot be claimed in respect of all and sundry payments of duty/tax. It is argued that only those refund claims arising out of declaration of unconstitutionality of statutory provisions can be said to be immune to time-bar. All other refund claims irrespective of how the duty/tax happened to be paid are subject to the limitation prescribed under the relevant statutory provisions. In this connection, reference has also been made to Mafatlal Industries v. Union of India [1997 (89) E.L.T. 247 (SC).
4.2 The non-taxability of renting of immovable property to hotels is clear from the relevant provisions (vide supra). These provisions were in force from day one. Nevertheless, the appellant paid service tax. After the period of limitation prescribed under section 11B of the Central Excise Act read with section 83 of the Finance Act 1994 ran out, they realized their “mistake of law” and claimed refund of the tax paid. Today their argument is that the refund should be lodged without any limitation as the tax was paid by mistake of law. This argument is totally unacceptable inasmuch as it is contrary to the dictum repeatedly laid down by the Hon’ble Supreme Court beginning with the landmark judgment in Mafatlal Industries (supra) wherein the paramount section 11B of the Central Excise Act vis-a-vis all kinds of claims of refund of duties of excise was recognized and declared by the Apex Court. It was this principle which was followed by the Hon’ble Kerala High Court in the case of Kerala State Electricity Board (supra) cited by the learned Superintendent (AR). This very principle was respectfully followed by this Tribunal in the case of Mysore Leasing & Finance Ltd. (supra) cited by the learned Superintendent (AR). There is no reason why this principle shall not be followed in the instant case. Some of the decisions cited by the appellant are clearly distinguishable and others do not represent good law.
4.3 As the provision of law which excluded renting of immovable property to hotels from the levy was in existence at the time of payment of service tax in question and continued to be in force till the date of refund claim and thereafter, the applicability of the provisions (including time-bar) of section 11B of the Central Excise Act to the refund claim cannot be ruled out on the plank of payment of tax by mistake of law. The appellant has failed to cite, any binding judicial authority
5. In the result, the appeal is dismissed.