2018 (12) TMI 1298 - AT - Service Tax

SEZ Unit - Refund of service tax paid - only reason which has been given for rejection of the refund claim is that the appellant has not produced required documents and further the reasons for the delay in the application seeking condonation are not convincing - Held that - In the N/N. 12/2013, discretion is given to the Assistant Commissioner for condonation of delay in filing the refund application. Further, the appellants have given reasons for seeking condonation but the same have not been considered by the authorities below and the reasons for delay are beyond the control of the appellant. The condition regarding the time limit is procedural only and it should be liberally interpreted and by taking a liberal approach, the delay in filing the refund application filed before the authorities below is condoned and the impugned order is set aside by remanding the case back to the original authority to decide the claim on merit - appeal allowed by way of remand.

Summary

Issues:
- Rejection of refund claim on the grounds of time bar and condonation of delay.

Analysis:
The appeal was directed against the order rejecting the appellant's refund claim of service tax. The appellant, a SEZ unit manufacturing wind mill parts, filed a refund claim of ?39,46,171 under Notification No. 12/2013-ST for service tax paid from July 2014 to September 2014. The Asst. Commissioner rejected the claim of ?30,14,429, which was upheld in the impugned order. The appellant contended that the rejection based on time bar and refusal to condone the delay was not legally sustainable. The appellant filed the refund claim on 30/06/2015 and also sought condonation of delay on the same day, citing specific reasons for each service provider. The appellant argued that the conditions for refund were met, and the delay was beyond their control. The appellant relied on legal precedents emphasizing the distinction between substantive and procedural conditions, advocating a liberal interpretation of time limits for filing claims. The appellant also highlighted a previous successful appeal where delay was condoned, supporting their argument with relevant case law.

The appellant's counsel argued that the impugned order failed to consider the reasons for delay adequately and did not appreciate the grounds presented in the condonation application. The appellant provided detailed explanations for each service provider's delay, attributing them to circumstances beyond their control. The counsel stressed that the conditions for refund were fulfilled, and the rejection solely based on delay was unjust. The appellant's reliance on legal precedents and comparison with similar cases supported their plea for a liberal interpretation of time limits. The appellant's submission aimed to demonstrate that the delay in filing the refund claim was procedural and should not bar them from receiving the refund. The counsel's thorough analysis of the facts and legal principles sought to establish the appellant's eligibility for refund despite the delay in filing the claim.

The Assistant Commissioner, represented by the learned AR, supported the findings of the impugned order, emphasizing the appellant's alleged failure to provide necessary documents for the refund claim. The AR argued that the decision to grant an extension for filing the claim rested on the appellant's ability to substantiate their case with proper documentation. The AR's stance implied that the rejection of the claim was justified due to the appellant's purported lack of essential documents and failure to meet the requirements for a time extension. The AR's position suggested that the authorities were within their discretion to deny the refund based on the appellant's failure to satisfy the evidentiary demands for the claim.

In the final analysis, the Tribunal found that the primary reason for rejecting the refund claim was the appellant's purported failure to produce required documents and the perceived lack of convincing reasons for the delay in seeking condonation. However, the Tribunal noted that the delay reasons provided by the appellant were beyond their control, and the time limit condition in the notification was procedural in nature. Citing legal precedent and the spirit of the notification, the Tribunal adopted a liberal interpretation, condoning the delay and remanding the case for a merit-based decision. By emphasizing the procedural nature of the time limit condition and the need for a liberal approach in interpreting such provisions, the Tribunal ruled in favor of the appellant, directing a reconsideration of the claim based on the documents submitted and to be provided for verification.

(Order pronounced on 28/11/2018)