2019 (7) TMI 1179 - AT - Service Tax

Refund Claim u/s 104 of the Finance Act, 2017 - retrospective exemption in certain cases relating to long term lease of industrial plots - applicability of time limitation - HELD THAT - The issue is more or less identical to the case of M/S. ROOP AUTOMOTIVES LTD. VERSUS THE COMMISSIONER OF G.S.T. CENTRAL EXCISE, CHENNAI OUTER COMMISSIONERATE 2019 (7) TMI 907 - CESTAT CHENNAI where it was held that The time-limit prescribed under Section 104 (3) is only directory, but however, the time as well as the procedure prescribed under Section 11B applies in full. The Adjudicating Authority is therefore required to grant refund if the refund application is within the time-limit prescribed under Section 11B and not otherwise. Appeal allowed in part and part matter on remand.

Summary

Issues:
Appeal against denial of refund under Section 104 of the Finance Act, 2017.

Analysis:
The appellant was allotted an industrial plot by SIPCOT for 99 years, and a one-time development charge was collected towards Service Tax by SIPCOT. Section 104 of the Finance Act, 2017 granted retrospective exemption from taxability on such charges. The issue revolved around the service provider passing on the duty to the taxpayer and requesting the recipient to apply for a refund. The appellant claimed a refund after SIPCOT issued a letter of no objection. However, the refund claim was rejected in the Order-in-Original and the First Appellate Authority's order.

During the hearing, the appellant's advocate pointed out similarities with another case involving M/s. Roop Automotives Ltd. The Tribunal noted that Section 104 excludes the charging Sections 66 and 66B, and the refund claim must be made within six months of the Finance Bill, 2017 receiving the President's assent. The Section does not prescribe a specific format for the refund claim, but it must be made under Section 11B via Section 83 of the Finance Act. Refund applications must include necessary documents and evidence.

The Tribunal referred to a Supreme Court judgment emphasizing that procedure should serve justice. It concluded that Section 104 is dependent on Section 11B, and all procedures under Section 11B apply. The use of 'shall' in Section 104(3) was considered directory, and the benefit of refund cannot be denied if eligibility is not questioned. The time-limit under Section 104(3) was deemed directory, but the time and procedure under Section 11B apply in full.

Based on the above analysis and the similarity of facts with the M/s. Roop Automotives Ltd. case, the Tribunal set aside the impugned order, partly allowed and partly remanded the appeal with a specific direction to ascertain if the refund application met the limit under Section 11B. If within the limit, the refund should be issued with consequential benefits.

Therefore, the Tribunal's decision was in favor of the appellant, emphasizing the importance of following the prescribed procedures for refund claims under Section 104 of the Finance Act, 2017.