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Judgment
The present appeal is directed against the impugned order dated 06.08.2020 passed by the Commissioner (Appeals) whereby the Commissioner (Appeals) has rejected the appeal of the appellant and upheld the Order-in-Original.
Briefly the facts of the present case are that the appellant is engaged in providing taxable services under the category of "Airport Services" and other taxable services and holding Service Tax Registration. The appellant filed a refund claim being an amount of Rs.3,79,85,793/- before the Deputy Commissioner of Central Excise along with necessary documents. The said amount was lying in balance in their credit as on June 2017 which was paid by the appellant as advance payment under sub-Rule 1A of Rule 6 of Service Tax Rules and the said refund claim was filed on 10.01.2018. After following the due process, the Deputy Commissioner while confirming the proposals in the SCN held as under:
a) concluded that an amount of Rs.15,00,000 paid vide two challans No. 2759 dated 05.07.2016 and 0652 dated 06.08.2016 is liable for rejection as time-barred in terms of Section 11B of the Central Excise Act, 1944 as the prescribed intimation has not been given.
b) rejected the submission that the impugned deposits were utilized in the month of April 2017 and the refund claim of Rs.3,79,85,793/- is only from the advance payments in the month of June 2017, and hence the refund claim is not time-barred.
c) rejected the contention that claim of refund of balance under existing law (i.e. service tax paid under Finance Act 1994) is not subject to the time limit stipulated in sub-section (1) of Section 11B in the CE Act in view of section 142(5) of the CGST Act 2017 and only sub-section (2) is made applicable.
Aggrieved by the said order, the appellant filed appeal before the Commissioner who vide the impugned order has rejected the appeal. Hence, the present appeal.
Heard both the parties and perused the records of the case.
Learned Consultant appearing for the appellant submitted that the impugned order is not sustainable in law as the same has been passed without properly appreciating the facts and the law and the binding judicial precedents. He further submitted that it is an undisputed fact that the refund application was filed on 10.01.2018 for refund of service tax advance deposit of Rs.7,25,37,620/- during the quarter April 2017 to June 2017 as per Rule 6(1A) of Service Tax Rules, vide challan Nos. 1420 and 9589 in June 2017. He further submitted that it is evident from ST-3 summary and deposit and utilization of April to June 2017 quarter account current, in Para 5 of Orderin-Original, that refund claim of Rs.3,79,85,793/- arises out of deposits in April-June 2017 quarter, which comes to Rs.7,65,06,454/-. He further submitted that it was only a simple proposition that the amounts paid first was appropriated against tax due and what is carried forward is the amount last paid that the Respondent ought to have expected that the refund of balance i.e. service tax paid under Finance Act 1994 is not subject to time limit in sub-section (1) of Section 11B of Central Excise Act and in view of Section 142 (5) of the CGST Act 2017. He further submitted that it is well settled that time-bar under Section 11B(1) of the Central Excise Act is not applicable to advance/deposits, wrong remittance of tax not payable, other payments which are in the nature of taxes or duties etc. For this submission, he relied upon the decision in the following cases:
· Fluid Controls Pvt. Ltd. Vs CCE & ST, Pune-I, 2018 (364) ELT 1041 (Tri.-Mumbai).
· R.S. Chemicals Vs CCE, Noida, 2017 (353) ELT 247 (Tri. All.)
4.1. It is his further submission that it is settled position of law that intimation under rule 6(1A) of the Service Tax Rules, 1994 is only a procedural formality and inclusion of advance deposits in ST-3 Returns is sufficient compliance. Mere non-observance of procedure laid down in Rule 6(1A) ibid cannot be made ground for denial of adjustment and disallowance amounts to unjustly enrich Government with excess amount which is not the intention of law and is also contrary to provisions of Article 265 of the Constitution of India. For this submission, he relied upon the following decisions:
· Dell India Pvt. Ltd. Vs CST, Bangalore, 2016 (42) STR 273 (Tri. Bang.)
· CCE & ST, Hyderabad-II Vs State Bank of Hyderabad, 2016-TIOL-110- CESTAT-HYD-2016-(43) STR 415 (Tri. Hyd.)
· Garima Associates Vs CCE, Chandrapur, 2015 (40) STR 247 (Tri. Mumbai)
· Cheery Hill Interiors Ltd. Vs CST, Delhi, 2016 (42) STR 74 (Tri. Del.)
4.2. Learned Counsel also made an alternate submission that as per Section 142(5) of the CGST Act, 2017 which provides for cash refund in situations specified in Section 11B(2) of the Central Excise Act but by an express non-obstante clause, it is provided that none of the other provisions of existing law will be applicable other than sub-section (2) of Section 11B of the Central Excise Act. It is pertinent to note the provisions of Section 142(5) which reads as follows:
(5) Every claim filed by a person after the appointed day for refund of tax paid under the existing law in respect of services not provided shall be disposed of in accordance with the provisions of existing law and any amount eventually accruing to him shall be paid in cash, notwithstanding anything to the contrary contained under the provisions of existing law other than the provisions of sub-section (2) of section 11B of the Central Excise Act, 1944. (emphasis supplied by us)
4.3. He further submitted that Clause (B) of proviso to Section 11B(2) provides for cash refund of balance in account current by providing as follows:
"unspent advance deposits lying in balance in the applicant's account current maintained with the Principal Commissioner of Central Excise or Commissioner of Central Excise;"
On the other hand, learned AR reiterated the findings of the impugned order.
After considering the submissions of both the parties and perusal of the material on record, I find that following the introduction of GST w.e.f. 01.07.2017, the appellant on 10.01.2018 filed a refund claim of Rs.3,79,85,793/- being excess advance tax lying to their credit in terms of transitional provisions in Section 142 of the CGST Act 2017 deposited as service tax in advance under Rule 6(1A) of the Service Tax Rules, 1994. Further, I find that as per the decision in the case of Fluid Controls Pvt. Ltd. and decision in the case of R.S. Chemicals (both cited supra), time bar of Section 11B(1) of the Central Excise Act is not applicable to advance/deposits, wrong remittance of tax not payable and other payments which are not in the nature of taxes or duties. The other ground for rejection of the claim was that the appellant has not given intimation of advance deposit of Rs.15,00,000/- as required under Rule 6(1A) of Service Tax Rules, 1994. This issue has been considered by various Benches of the Tribunal and has been consistently held to be a procedural formality and merely nonobservance of the procedure laid down in the said Rule cannot be a ground for denial of substantive benefit. I also find that as per Section 142(1) of CGST Act which provides for cash refund in situations specified in Section 11B(2) of the Central Excise Act and the appellant's case is squarely covered by Clause B of proviso to Section 11B(2) which provides for cash refund of balance in account current.
In view of my discussion above, I find that the impugned order is not sustainable in law and therefore the same is set aside by allowing the appeal of the appellant.
(Order pronounced in the open court on 19/03/2021)