Case Law Details

Case Name : Apnacar.Com Pvt. Ltd. Vs Commissioner of Central Tax (CESTAT Bangalore)
Appeal Number : Service Tax Appeal No. 20373 of 2020
Date of Judgement/Order : 12/10/2021
Related Assessment Year :

Apnacar.Com Pvt. Ltd. Vs Commissioner of Central Tax (CESTAT Bangalore)

On merits, the adjudicating authority has observed that the appellant’s claim was not supported by any documentary evidences. Further, I also find that the Chartered Accountant certificate furnished by the appellant is given in 2019 while the payments were made in the year 2008. The Chartered Accountant has specified that the said certificate was issued at the ‘request of the appellant’. Hence the certificate is only a self serving document which cannot be considered as a conclusive proof to decide the issue. Law provides permissible documentary evidences that are accepted by the sanctioning authority and apparently, no effort seems to have been made by the appellant in this regard. But considering the fact that the refund is subject to Section 11B wherein the authority has to credit the amount claimed to the welfare fund if the claimant is not entitled for the same, which having not been done, I am of the view that the appellant deserves a second chance.

In the light of the above discussion, I deem it proper to set aside the impugned order and remand the case back to the file of adjudicating authority before whom the appellant shall furnish necessary documentary evidences in support of its claim and the adjudicating authority shall thereafter pass a speaking order after considering all such evidences that may be furnished by the appellant in this regard.

FULL TEXT OF THE CESTAT BANGALORE ORDER

The only issue to be decided in this appeal is, whether the appellant is entitled for the refund of Rs. 13,28,220/- (Rupees Thirteen Lakhs Twenty Eight Thousand Two Hundred and Twenty only) under Section 13B of the Central Excise Act, 1944?

2. Shri Ramesh Ananthan, learned Advocate appeared for the appellant and Shri P. Gopakumar, learned DR appeared for the Revenue.

3. The factual matrix leading to the present dispute, as could be gathered from the orders of lower authorities and the arguments of both the sides, are summarized below:

  • During the investigation of the case by the DGCEI Bangalore, appellants had pre-deposited a sum of Rs. 19,00,000/- (Rupees Nineteen Lakhs) as Service Tax liability which was not quantified by them or by the Department during the relevant time;
  • Appellants had paid a sum of Rs. 28,84,222/- (Rupees Twenty Eight Lakhs Eighty Four Thousand Two Hundred and Twenty Two only) in the regular course during the period of 01/04/2014 to 31/03/2008 plus Rs. 19,00,000/- (Rupees Nineteen Lakhs only) as a pre-deposit of which, a sum of Rs. 35,39,884/- (Rupees Thirty Five Lakhs Thirty Nine Thousand Eight Hundred and Eighty Four only) was appropriated by the Department in the adjudication proceedings including the interest portion;
  • The penalty imposed was paid in full and further the penalty under Section 78 of the Finance Act, 1994 was also paid as undertaken before the Appellate proceedings putting an end to the litigation as ordered by the Commissioner (Appeals);
  • The interest liability was also appropriated in the adjudicating proceedings and as such the pre-deposit made during the investigation/prior to the conclusion of investigation of the case an excess amount of Rs. 13,28,220/- (Rupees Thirteen Lakhs Twenty Eight Thousand Two Hundred and Twenty only) excess than the liability accruing to the Department in any manner;
  • Appellants also enclosed the attested/certified copies of challans for having made the payment to the Department pending investigation and the said amount is excess towards the Service Tax liability quantified by the Department and a letter addressed to the Department intimating that they have pre-deposited amount of Rs. 19,00,000/- (Rupees Nineteen Lakhs only) which was in excess of the liability to the Department;
  • Appellants had thereafter claimed the refund of Rs. 13,28,220/-(Rupees Thirteen Lakhs Twenty Eight Thousand Two Hundred and Twenty only) which was originally paid by them under Challans during the investigation period pending adjudication by the Competent Authority;
  • This aspect of deposit were brought to the notice of the original adjudicating authority and the same was also reflected before the Appellate authority, appropriated the tax liability on the strength of challan that were produced by them and as such, these deposits that were made during the period of investigations was not appropriated;
  • It is well settled law that any deposit that are made during the investigations are only pre-deposits which become liable to be refunded on completion of the adjudication proceedings suo moto by the Department. In the instant case, by virtue of Order-in-Appeal being passed adjudication proceedings had come to an end.
  • In this regard they have provided the challan-wise details as to when the deposits were made and to this effect, they also provided a Chartered Accountant’s certificate;
  • In the instant case they have not passed any liability since it is only related to the services already provided under the different bills raised by them;
  • It is also evidenced by the Chartered Accountant certificate that the amount of tax/duty paid has already been transferred to the profit and loss account and accordingly, the issue of unjust enrichment does not arise;
  • The claimant had furnished a Chartered Accountant certificate dated 18/01/2019 who had certified, at the request of the appellant, that a few of the payments were made from the appellant’s sister concerns towards Service Tax during investigation;
  • The claimant has not submitted a clear break up as to how the refund claim amount was arrived at. The appellant claims to have paid a sum total of Rs. 19,00,000/- (Rupees Nineteen Lakhs only) as ‘pre-deposit’ in March-08. The Order-in-Original has appropriated only Rs. 10,00,000/- (Rupees Ten Lakhs only) as the balance Rs. 9,00,000/- (Rupees Nine Lakhs only) pertain to challans made under a Service Tax registration which does not pertain to the claimant i.e. M/ Apnacar.com;
  • The appellants claimed that it had paid Rs. 28,84,222/- (Rupees Twenty Eight Lakhs Eighty Four Thousand Two Hundred and Twenty Two only) before the issuance of show-cause notice which however, in the Order-in-Original the adjudicating authority had confirmed that it was only Rs. 25,39,884/- (Rupees Twenty Five Lakhs Thirty Nine Thousand Eight Hundred and Eighty Four only) against which the appellant had not submitted any challans during the said adjudication proceedings;
  • The adjudicating authority in the Order-in-Original (para 23.2 of O-I-O) gave a clear finding that payments referred to in sl. no. E, F & G of Table C above amounting to Rs. 9,00,000/- (Rupees Nine Lakhs only) shown to have been paid by the assessee were not paid against the claimant’s ST Registration;
  • The claimant has not submitted any documents evidencing that the incidence of duty has not been passed on, and hence, the instant refund claim is hit by Doctrine of unjust enrichment;
  • Vide the Order-in-Original dated 29/03/2019 the appellant’s claim for refund was rejected;
  • On Appeal, the Commissioner of Central Tax (Appeals-I) Bangalore, vide impugned Order-in-Appeal No. 388/2020 dated 07/09/2020 has upheld the rejection.

4. Learned advocate would also contend that it is a case of Approbate and Reprobate which is not permissible in law. He also relied on a number of decisions to buttress his argument that the limitation of one year prescribed under Section 11B ibid would not apply when any duty was paid under protest and during investigation. Per contra, learned DR supported the findings of lower authorities.

5. I have considered the rival contentions, perused the documents placed on record and have also carefully gone through the decisions relied upon during hearing.

5.1. The undisputed fact is that there was excess payment of taxes by the appellant which was claimed as refund later on. The lower authorities have also cited the time-limit prescribed under Section 11B ibid to reject the refund claim as time-barred. Hon’ble High Court of judicature at Madras in one of its decisions in the case of M/s. 3E Infotech Vs. CESTAT and another reported in 2018 (18) GSTL 410 (Mad.) has considered an almost identical issue and, has, after considering decisions of the Hon’ble Apex Court as well as other High Courts, held that application under Section 11B for refund cannot be rejected on the ground that it is barred by limitation. Relevant portion of the said judgment is reproduced below for convenience:

“….12. Further, the claim of the respondent in refusing to return the amount would go against the mandate of Article 265 of the Constitution of India, which provides that no tax shall be levied or collected except by authority of law.

 13. On an analysis of the precedents cited above, we are of the opinion, that when service tax is paid by mistake a claim for refund cannot be barred by limitation, merely because the period of limitation under Section 11B had expired. Such a position would be contrary to the law laid down by the Hon’ble Apex Court, and therefore we have no hesitation in holding that the claim of the assessee for a sum of Rs. 4,39,683/- cannot be barred by limitation, and ought to be refunded.

14. There is no doubt in our minds, that if the Revenue is allowed to keep the excess service tax paid, it would not be proper, and against the tenets of Article 265 of the Constitution of India. On the facts and circumstances of this case, we deem it appropriate to pass the following directions:-

a) The Application under Section 11B cannot be rejected on the ground that is barred by limitation, provided for under Section.

b) The claim for return of money must be considered by the authorities.”

To this extent, therefore, the rejection of refund claim as time-barred cannot be sustained.

5.2. On merits, the adjudicating authority has observed that the appellant’s claim was not supported by any documentary evidences. Further, I also find that the Chartered Accountant certificate furnished by the appellant is given in 2019 while the payments were made in the year 2008. The Chartered Accountant has specified that the said certificate was issued at the ‘request of the appellant’. Hence the certificate is only a self serving document which cannot be considered as a conclusive proof to decide the issue. Law provides permissible documentary evidences that are accepted by the sanctioning authority and apparently, no effort seems to have been made by the appellant in this regard. But considering the fact that the refund is subject to Section 11B wherein the authority has to credit the amount claimed to the welfare fund if the claimant is not entitled for the same, which having not been done, I am of the view that the appellant deserves a second chance.

6. In the light of the above discussion, I deem it proper to set aside the impugned order and remand the case back to the file of adjudicating authority before whom the appellant shall furnish necessary documentary evidences in support of its claim and the adjudicating authority shall thereafter pass a speaking order after considering all such evidences that may be furnished by the appellant in this regard.

7. The appeal stands allowed by way of remand with the above directions.

(Order was pronounced in Open Court on 12/10/2021)

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