2017 (10) TMI 141 - AT - Service Tax

Refund of service tax paid - retrospective exemption - rejection of refund on the ground that the same was filed beyond the period of six months as stipulated u/s 103 of Finance Act, 2016 and thus barred by limitation - the Respondent filed an application on 28.11.2016 for refund of Service Tax of ₹ 12,67,61,271/-paid during the period 01.04.2015 to 29.02.2016 - whether the refund claim filed on 28.11.2016 is admissible to the Appellant even though it was filed beyond the time limit prescribed under sub-sec.(3) of Section 103 of Finance Bill,2016, where under an application for refund shall be made within a period of six months from the date on which Finance Act, 2016 receive the assent of the President of India? - The learned Commissioner (Appeals), considering the delay as mere procedural lapse, condoned the same and held that the refund is admissible to the Appellant - whether learned Commissioner (Appeals) is correct in enhancing the period of six months and condoning the delay? Held that - it is clear that the intention of the legislature while enacting Section 103 of Finance Act,2016 was to provide the refund of Service Tax paid during the period 01.4.2015 to 29.02.2016 within a period of six months from the date of assent to the Finance Bill 2016 by the President of India. Therefore, the legislature must have taken into consideration the circumstances/eventualities in prescribing the period of limitation in filing the refund claim, without making any reference to possible delay in filing it and then authorizing the officers exercising jurisdiction, to condone the same on sufficient cause being shown. The question whether the time limit prescribed under the refund provisions in the context of refund claimed could be relaxed/ extended by the authorities, has been considered by the Hon ble Supreme Court in the case of UOI Vs. Kirloskar Pneumatic Company 1996 (5) TMI 87 - SUPREME COURT OF INDIA , where it was held that The power conferred by Article 226/227 is designed to effectuate the law, to enforce the Rule of law and to ensure that the several authorities and organs of the State act in accordance with law. It cannot be invoked for directing the authorities to act contrary to law - Their Lordships of Hon ble Gujrat High Court in Indian Oil Corporation Ltd. s case 2011 (12) TMI 540 - GUJARAT HIGH COURT laying down the principle that limitation prescribed under Sec.11B of CEA, 1944 is not a procedural one and thus the period laid down thereunder cannot be extended. It can safely be inferred that the period of six months prescribed under Sub. Sec.(3) of Sec.103 of the Finance Act,2016 cannot be extended by the departmental authorities. The Ld. Commissioner(Appeals) has erred in condoning the delay in filing the refund claim by the Respondent - appeal allowed - decided in favor of Revenue.

Summary

Issues Involved:
1. Admissibility of the refund claim filed beyond the six-month period prescribed under Section 103 of the Finance Act, 2016.
2. Jurisdiction of the Commissioner (Appeals) to condone the delay in filing the refund claim.
3. Applicability of the Limitation Act, 1963 to the time limit prescribed under Section 103 of the Finance Act, 2016.

Detailed Analysis:

1. Admissibility of the Refund Claim Filed Beyond the Six-Month Period:

The central issue was whether the refund claim filed on 28.11.2016 by the Respondent was admissible, given that it was beyond the six-month period stipulated under Section 103 of the Finance Act, 2016. The Finance Bill received the President's assent on 14.05.2016, making the due date for filing the refund claim 14.11.2016. The adjudicating authority rejected the refund claim as it was filed beyond this period. The Commissioner (Appeals) condoned the delay, considering it a procedural lapse. However, the Tribunal found that the six-month period prescribed under Section 103 is mandatory and not extendable, emphasizing that the legislative intent was to provide a strict time frame for such claims.

2. Jurisdiction of the Commissioner (Appeals) to Condon the Delay:

The Revenue argued that the Commissioner (Appeals) exceeded his jurisdiction by condoning the delay, as there is no provision under Section 103 for extending the six-month period. The Tribunal supported this view, stating that neither the Commissioner (Appeals) nor the Tribunal has the jurisdiction to extend the time limit prescribed by the statute. The Tribunal cited the Supreme Court's decision in Union of India vs. Kirloskar Pneumatic Co. and the Gujarat High Court's decision in Indian Oil Corporation Ltd. vs. Union of India, which held that statutory time limits for refund claims are not procedural and cannot be extended by authorities.

3. Applicability of the Limitation Act, 1963:

The Respondent argued that the time lost in obtaining necessary documents should be excluded from the six-month period under Section 15 of the Limitation Act, 1963. They cited the Supreme Court's judgment in M.P. Steel Corporation vs. CCE. However, the Tribunal rejected this argument, referencing the Supreme Court's decision in CCE vs. Hongo India (P) Ltd., which clarified that the Limitation Act does not apply to the time limits prescribed under special laws like the Finance Act, 2016. The Tribunal emphasized that the Finance Act, 2016 is a self-contained code, and the legislative intent was to provide a strict and unextendable time frame for filing refund claims.

Conclusion:

The Tribunal concluded that the Commissioner (Appeals) erred in condoning the delay in filing the refund claim. The six-month period prescribed under Section 103 of the Finance Act, 2016 is mandatory and cannot be extended by any authority, including the Tribunal. The Tribunal set aside the order of the Commissioner (Appeals) and allowed the Revenue's appeal, underscoring the importance of adhering to statutory time limits for refund claims.