2020 (1) TMI 98 - AT - Service Tax

Refund of service tax - time limitation - relevant period for claiming refund - whether the period of one year has to reckon from the date of actual payment of service tax made by the SEZ Unit - HELD THAT - That there is no denial for appellant to be a SEZ unit nor there is denial of applicability of Notification No. 12/2013-ST dated 1st July, 2013. This Notification provides exemption to the services provided in SEZ Unit or developer of SEZ for authorized operations - Since part of the refund has been sanctioned it becomes clear that the services received in SEZ Unit were for the authorized operations. Time limitation - Sub-clause (iii) (e) of Clause (3) of the notification - HELD THAT - The bare perusal of the clause makes it clear that the relevant date from which is to reckon the period of limitation is the end of the month in which the SEZ Unit paid the Service Tax. It is the case of the appellant that from the date of the payment of service tax by him his refund claim is well within the period of limitation. From the order under challenge, it is clear that date of invoice to the ISD of appellant SEZ is taken as the starting point for the period of limitation - The date of payment of Service Tax is, however, not available on the record. It is not possible for us to verify as to whether the date of invoice and date of payment of service tax are same or not - it is deemed appropriate that the matter be remanded back to the original adjudicating authority to verify as to what is the date on which the appellant, the SEZ Unit made the payment of service tax and then to adjudicate as to whether the impugned claims are within the time limit or not. It is further observed from the aforesaid Clause that for the refund claims which could not be filed within one year of the relevant date, the Assistant Commissioner /Dy. Commissioner of Central Excise, as the case may be, are vested with the power to condone the said delay to such extended period as they deem fit. The Original Adjudicating Authority herein has miserably been silent about its power of condonation - Though it has been recorded by the adjudicating authorities below that the Notification have to be strictly read and no alteration, addition and even deletion is permissible to the language therein, but still has ignored/ deleted such portion of the Notification, which simultaneously empowers the authorities to condone the delay, if any, is found. The same is held as not appreciable but unreasonable on part of the adjudicating authority below. The findings in the order under challenge that discretion of adjudicating authority cannot be scrutinized about its reasonableness by the appellate authority are also held to be wrong - the matter remanded to original adjudicating authority with directions to take a fresh call about the time barred issue - appeal allowed by way of remand.

Summary

Issues:
1. Rejection of refund claims as barred by time under Notification No.12/2013-ST.
2. Applicability of the one-year limitation period for filing refund claims.
3. Discretion of adjudicating authorities to condone delay in filing refund claims.

Analysis:
1. The judgment addresses the rejection of refund claims by M/s. Lupin Ltd. as time-barred under Notification No.12/2013-ST. The appellant argued that the one-year limitation period should be calculated from the date of actual payment of service tax by the SEZ Unit, not the date of the invoice to the ISD. The Tribunal found discrepancies and remanded the matter to verify the actual date of service tax payment to determine if the refund claims were within the time limit.

2. The Tribunal examined the provision under sub-clause (iii) (e) of Clause (3) of the Notification, which mandates filing refund claims within one year from the end of the month in which the SEZ Unit paid the service tax. It was noted that the adjudicating authority did not consider the power to condone delay, as per the Notification, which was deemed unreasonable. The Commissioner (Appeals) was criticized for not addressing this legal lacuna and for misinterpreting the discretion of the adjudicating authority. Consequently, the Tribunal set aside the order and remanded the matter for a fresh decision on the time-barred issue.

3. The Tribunal highlighted the authority's power to condone delays in filing refund claims beyond the one-year limit. It criticized the adjudicating authorities for not considering this provision and directed the original adjudicating authority to reevaluate the time-barred issue and determine if any delay could be condoned. The Tribunal allowed the appeals by way of remand, emphasizing the need for a thorough review of the time limitation and the discretion to condone delays in filing refund claims.