2021 (8) TMI 169 - AT - Service Tax

Refund of service tax paid - service provided by the State Government or KINFRA by way of providing long term lease exceeding 30 years or more which was exempt from service tax - time limitation - refund rejected on the ground that the application for refund did not meet the requirements under Section 11B of the Central Excise Act, 1944 as made applicable to Finance Act, 1944 vide Section 83 of the Act - HELD THAT - The appellants filed refund claims which arose as a consequence of introduction of Section 104 of the Finance Act w.e.f. 31.03.2017. Further, N/N. 41/2016 dated 22.09.2016 has exempted taxable service provided by the State Government Industrial Development Corporation/Undertakings to industrial units by way of granting long term lease on industrial plot from so much of service tax leviable thereon under Section 66B of the said Act, as is leviable on the one-time upfront amount payable for such lease. Vide Section 104 (1), exemption was provided from said services for the period from 01.06.2007 to 21.09.2016 and it was provided that the refund claim should be filed within a period of six months from the date from which Finance Act, 2017 is promulgated and come into force. In the present case, the appellants filed the refund claims within time and the only ground for which the refunds were rejected by the Original Authority and upheld by the Appellate Authority is that the appellants did not produce sufficient documents in the form of invoices/bills showing that they have paid the service tax to KINFRA. During the pendency of the appeals, the appellants filed various invoices/bills issued by KINFRA showing the payment of service tax by the appellant for which the refund claims have been filed by the appellant. Further, KINFRA has also issued a certificate dated 02.02.2021 certifying that they have not availed any CENVAT credit on the service tax paid by the appellants. Further, these bills/invoices issued by KINFRA clearly show the payment of service tax by the appellant to KINFRA and KINFRA in turn has paid the same to the Government. Though these invoices/bills were not produced before the Original Authority but various Challans issued by KINFRA were produced along with worksheets showing the payment of service tax to KINFRA by the appellants. In view of the facts that now the appellants have produced sufficient documents to prove the payment of service tax, there are no justification for rejection of the refund claims - appeal allowed - decided in favor of appellant.

Summary

Issues:
Refund claim rejection based on non-submission of necessary documents.

Analysis:
The appellants filed refund claims under Section 104 of the Finance Act, 2017 for amounts paid towards taxable services provided by the State Government or KINFRA. The Deputy Commissioner rejected the claims citing non-compliance with Section 11B of the Central Excise Act, 1944. The Commissioner upheld the rejection, leading to the present appeals.

The appellant argued that Section 104 is a standalone provision, not restricted by Section 83 of the Finance Act, 1994 or Section 11B of the Central Excise Act, 1944. They provided evidence of tax payment to KINFRA and non-transfer of tax incidence. The AR contended that the refunds were rightly denied due to insufficient documentation.

The Tribunal noted that the refund claims arose from Section 104's introduction, exempting services from service tax for a specified period. The appellants filed claims within the stipulated time. The main reason for rejection was lack of invoices/bills showing tax payment to KINFRA. However, during the appeal, the appellants submitted invoices/bills and a certificate from KINFRA confirming no CENVAT credit availed. These documents proved tax payment to KINFRA and subsequent remittance to the Government.

Considering the newly submitted evidence, the Tribunal found no basis for the rejection and set aside the impugned orders, allowing the appeals of the appellants.