2016 (12) TMI 1471 - AT - Service Tax

SEZ unit - refund claim - refund of tax paid on various input services used/utilized in the authorized operation of the SEZ unit - rejection on the ground that refund claim does not pertains to the relevant quarter of the financial year - Held that - On a conjoint reading of clause (e) and (f) contained in the Notification, it transpires that the statutory requirement of time limit for filing the refund application is contained in clause (e), which has to be strictly adhered to by the assessee for the purpose of claiming refund - Since Clause (f) is procedural in nature and the appellant in this case has compiled with the statutory Provisions of filing the refund application within one year from the date of payment of Service Tax to the service provider, in my opinion, rejection of refund claim of ₹ 4,64,114/- by the authorities below is not in conformity with the conditions laid down in Notification dated 01.07.2013 - appeal allowed - refund allowed - decided in favor of appellant.

Summary

Issues:
Refund claim rejection based on quarterly filing requirement under Notification No. 12/2013 - ST dated 01.07.2013.

Analysis:
The appeal challenged the order passed by the Commissioner (Appeals) regarding the rejection of a refund claim by a SEZ unit engaged in film manufacturing. The appellant had filed a refund claim of &8377; 82,60,860 for Service Tax paid on input services as per Notification No. 12/2013 dated 01.07.2013. The original authority rejected a portion of the claim amounting to &8377; 54,40,113, including &8377; 4,64,114 rejected for not pertaining to the relevant quarter of the financial year. The Commissioner (Appeals) upheld this rejection, leading to the appeal before the Tribunal.

The Notification No. 12/2013 dated 01.07.2013 provides exemption to taxable services in SEZ units for authorized operations. The refund procedure outlined in the notification requires filing within one year from the end of the month of actual Service Tax payment to the service provider. Additionally, the notification stipulates that a SEZ unit shall submit only one refund application per quarter. The appellant filed the refund claim within the prescribed time limit, but the authorities rejected a portion based on the quarterly filing requirement.

The Tribunal noted that the time limit for filing the refund application is a statutory requirement under clause (e) of the notification and must be strictly adhered to by the assessee. On the other hand, the quarterly filing condition in clause (f) is procedural to aid the Department in processing refund applications. As the appellant had complied with the statutory provision of filing within the specified time frame, the rejection of the &8377; 4,64,114 refund claim did not align with the conditions set forth in the Notification dated 01.07.2013.

Consequently, the Tribunal found no merit in the impugned order and ruled in favor of the appellant, allowing the appeal and granting the consequential benefit of refund.