2022 (4) TMI 1253 - AT - Service Tax

Refund of service tax - one time upfront amount (premium, salami, cost, price, development charge or by whatever name called) - taxable service provided or agreed to be provided by a State Government industrial development corporation or undertaking to industrial units - service by way of grant of long term lease of 30 years or more of industrial plots - denial of refund on the ground of non-production of requisite documents - period commencing from the 1st June, 2007 and ending with the 21st September, 2016 - HELD THAT - The issue is no longer res integra and the appellants have a strong case in their favour on merits as well as procedure. This Bench has gone into both the issues in the case of COMFORT NIGHT LINEN PRODUCTS AND PROCESS INSTRUMENTATION AND ENGINEERS VERSUS COMMISSIONER OF CENTRAL TAX CENTRAL EXCISE, CALICUT 2021 (8) TMI 169 - CESTAT BANGALORE and held that the refund is due to the appellants. The issue is squarely covered in favour of the appellants and the impugned orders are not sustainable - Appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeals against Orders-in-Appeal passed by the Commissioner(Appeals), Cochin regarding payment of service tax on long term lease of industrial land from Kerala Industrial Infrastructure Development Corporation (KINFRA).

Analysis:
The appellants filed appeals against Orders-in-Appeal passed by the Commissioner(Appeals), Cochin, related to the payment of service tax on long term lease of industrial land from KINFRA. The issue revolved around the applicability of service tax on the one-time upfront amount paid for long term lease. The appellants argued that as per the amendment introduced by the Finance Act, 2017, no service tax was payable on such upfront amounts during the period from June 1, 2007, to September 21, 2016. They contended that the issue was settled in their favor based on previous decisions by the Bench. The appellate authority had rejected their appeals citing non-submission of required documents under Section 11B of the Central Excise Act, 1944. The appellants had submitted invoices as evidence of service tax payment, but the appellate authority deemed them inadequate, stating that the documents should have been submitted at the adjudicating level.

The learned consultant for the appellants argued that the issue had already been addressed in previous cases by the Bench and that the refund was due to the appellants. The Department's Assistant Commissioner reiterated the findings of the Orders-in-Appeal. After hearing both sides and examining the case records, the Technical Member found that the issue was not new and that the appellants had a strong case on both merit and procedure. Referring to a previous case involving Comfort Night Linen Products, the Technical Member highlighted that the refund was justified as the appellants had filed refund claims within the stipulated time frame and had now provided sufficient documents, including invoices and bills, to prove the payment of service tax to KINFRA.

The Technical Member noted that KINFRA had issued a certificate confirming that they had not availed any CENVAT credit on the service tax paid by the appellants. The invoices and bills submitted clearly demonstrated the payment of service tax by the appellants to KINFRA, who in turn paid it to the Government. Despite these documents not being produced before the Original Authority, various Challans issued by KINFRA were presented along with worksheets showing the payment of service tax. Consequently, the Technical Member concluded that there was no justification for rejecting the refund claims. The impugned orders were set aside, and all the appeals were allowed in favor of the appellants. The orders were pronounced in open court on April 12, 2022.