2016 (6) TMI 446 - AT - Service Tax

Service tax refund - SEZ unit - Period of limitation - list of specified services required for authorized operation in unit duly approved by the approval committee was not submitted - No evidence of depositing the reduced payment to the extent of TDS against billed amount in the Government account - Held that - as far as non-submission of list of specified services duly approved by the approval committee is concerned, the issue is squarely covered vide judgment of CESTAT in the case of Markers Mart And Prince Exports Versus C.C.E & S. Tax., Jaipur II 2016 (2) TMI 258 - CESTAT NEW DELHI . Regarding the delay, the Commissioner (Appeals) observed in the impugned order that there was no application seeking extension of time for filing refund and therefore the claim is not wrongly held to be hit by time bar. Having said so, we would like to observe that the amount involved in this case is paltry and the revenue has stated that the appellant also has a factory where they claim refund of service tax under Notification No. 41/2007-ST and were following similar timeline in this case also. In these circumstances we are of the view that given the fact that there is a provision for condoning the delay in the notification No. 9/2009-ST and the delay was not unreasonable or deliberate, the delay deserved to be condoned and we condone the same. It is seen that the lower authority observed that the evidence of having deposited the TDS in the Government account was not submitted and therefore he did not allow the refund of service tax component pertaining to the TDS. While we do not find anything seriously unreasonable in the reasoning of the lower authority having regard to the fact that the amount involved on this account is paltry, the revenue has asserted that the TDS has actually been deposited in the Government account, the service provider has not disputed that fact and further, the service tax sought to refunded has actually been paid and the provisions of SEZ Act are overacting, we are of the view that reduction of refund amount pertaining to the amount deducted on account of TDS is unsustainable. - Decided in favour of appellant

Summary

Issues:
1. Rejection of service tax refund for specified grounds.
2. Non-submission of approved list of authorized operations.
3. Delay in filing refund claim.
4. Reduction of payment due to TDS deduction.

Analysis:
1. The appeal was filed against the rejection of a service tax refund for various grounds, including the non-submission of the approved list of authorized operations, delay in filing the refund claim, and reduction of payment due to TDS deduction. The appellant argued that previous judgments favored them on similar grounds. The respondent contended that no evidence of TDS deposit was submitted and the refund claim was time-barred. The Tribunal considered both sides' contentions.

2. Regarding the non-submission of the approved list of authorized operations, the Tribunal referred to a previous judgment where it was held that certain notifications did not disentitle immunity to service tax. The Tribunal found that the issue was squarely covered by the previous judgment, and the appellant's case was supported by the legal interpretation provided in the said judgment.

3. On the issue of delay in filing the refund claim, the Tribunal noted that the delay was within 2 days in a previous case, which was condoned due to intervening days. However, in the present case, the delay ranged from 5 days to 2.5 months. While the claim was not filed within the specified time frame, the Tribunal observed that the delay was not unreasonable or deliberate. Considering the provision for condoning delays and the paltry amount involved, the Tribunal decided to condone the delay.

4. Regarding the reduction of payment due to TDS deduction, the Tribunal acknowledged that TDS was deducted and deposited on behalf of the service provider. The lower authority had not allowed the refund of the service tax component related to TDS deduction due to lack of evidence of deposit. However, the appellant asserted that TDS had been deposited, and the service provider did not dispute this fact. The Tribunal found the reduction of the refund amount pertaining to TDS deduction unsustainable, especially considering the amount involved and the provisions of the SEZ Act.

5. In conclusion, based on the analysis of the arguments and relevant legal interpretations, the Tribunal set aside the impugned order and allowed the appeal, emphasizing the specific legal reasoning and factual circumstances presented during the proceedings.