Tax paid under a mistake of law must be refunded irrespective of limitation, as established in previous judicial precedents.

ORDER :

P.Dhanabal J.

These Civil Miscellaneous Appeals have been preferred as against the final orders No.40789 / 2019 and 40790 / 2019 dated 13.05.2019 passed by the Customs, Excise and Service Tax Appellate Tribunal, Chennai in Service Tax Appeal Nos.42538/2018 and 42539 /2018 respectively.

2. The short facts necessary to dispose of these appeals are as follows:-

The appellant is rendering software enable services in relation to pre-publication and exporting such services out of India. Based on export of services, the appellant filed refund claims under Rule 5 of CCR 2004 and upon scrutiny of the claim, the ACCE Puducherry II Division rejected the claim of Rs.4,27,776/- for the period from April to June 2014 and Rs.6,33,962/- for the period from October to December 2014 vide order OIO No.201 of 2015 dated 02.02.2015 pertaining to service tax paid by the Director of the company in her individual capacity by holding that the appellant was not liable to pay under RCM and hence credit taken was wrong and therefore, they are not eligible for refund. As against the said rejection order, the appellant preferred appeals before Commissioner (Appeals) and the same were also rejected through an order dated 29.07.2016. As against the said orders, further appeals were preferred before the CESTAT, Chennai and the same was also dismissed vide final order No.40623 and 40624 of 2017 dated 13.04.2017, however directing the appellant to seek refund under other facilitating provisions of law. Based on CESTAT final order dated 13.04.2017, the appellant took re-credit of the said amount and filed refund claims for Rs.6,33,962/- and Rs.4,27,776/- under Section 11 (B) of Central Excise Act, 1944. After due process of law, the lower Adjudicating Authority vide O-in-O No.63 of 2017 and 64 of 2017 dated 31.10.2017 sanctioned refund of the above said amounts. Aggrieved by the said orders, the department filed appeals against the said sanction of refund in Appeal Nos.170 and 171 of 2018 and the said appeals were allowed vide order dated 07.09.2018 by setting aside the order passed in O-in-O Nos.63 and 64 of 2017 dated 31.10.2017. Aggrieved by the said order, the appellant filed appeals before the Tribunal. The Tribunal vide Final Order Nos.40789 and 40790 of 2019 dated 13.05.2019 dismissed the said appeals by holding that the claim was not entertainable under Section 11 B of Central Excise Act. Challenging the said orders, the present appeals have been preferred.

3. While admitting these appeals, this Court formulated the following substantial questions of law:

3.1. Whether the authorities were right in denying refund claim of a tax amount that was paid due to a mistake of law.

3.2. Whether the authorities were right in denying refund claim of a tax amount that was paid due to a mistake of law by ignoring the various precedents set by the Hon’ble Supreme Court and High Courts.

3.3. Whether the authorities not following judicial precedents would amount to judicial indiscipline.

4. The learned counsel appearing for the appellant would submit that the order of the Tribunal is erroneous and the Tribunal failed to consider the evidences on record before adjudicating the matter. The Tribunal in the appellant’s very own case addressing the very same issue for a different time period, had observed that the eligibility of Cenvat credit is purely based on usage, therefore the Original Authority in the order had clearly stated and held that when it is the Appellant who is the user of the service and when the said usage is in the course of business, the impugned services will qualify as input service and the tax paid on such service will be eligible for credit. In the