2022 (8) TMI 643 - AT - Service Tax

Rejection of claim of refund of service tax - exemption in certain cases relating to construction of Government buildings - Section 102 of the Finance Act, 1994 - HELD THAT - In terms of the provisions of Section 102 of FA, the appellant claimed refund of tax paid on certain services, that they claimed to have provided to military establishments. Due to the sensitive nature of the contract, the appellant could not produce the full text of the contract before the Revenue authorities and solely for that reason the refund has been rejected. It is seen that the appellant have produced certificates of Garrison Engineers showing the nature of work done and the date of contract, which are two relevant factors needed for processing the claim. Merely because the original contracts could not be produced, due to them being covered by Official Secrets Act, the rejection of refund claim is not correct. The orders of lower authorities do not examine the certificates of the Garrison Engineers which prescribes not only the nature of contract but the date of contract as well. The original adjudicating authority will take the Certificate of the Garrison Engineers on the face value and process the refund claim accordingly, for each contract and give finding - The appeal is partly allowed by way of remand.

Summary

Issues:
Refund claim of service tax under Section 102 of the Finance Act, 1994 - Rejection of refund claim based on inability to produce full contract text due to sensitive nature of the contract - Appellant producing certificates of Garrison Engineers as evidence - Lower authorities not considering certificates - Partial allowance of appeal by way of remand - Ineligibility for refund claim in contracts entered after 2015.

Analysis:
The appeal was filed against the rejection of a refund claim of service tax under Section 102 of the Finance Act, 1994. Section 102 provides a special provision for exemption in certain cases related to the construction of Government buildings. The appellant claimed a refund of tax paid on services provided to military establishments. The appellant could not produce the full text of the contracts due to the sensitive nature of the contracts, which led to the rejection of the refund claim. However, the appellant did present certificates of Garrison Engineers detailing the nature of work done and the date of the contract, essential for processing the claim. The rejection of the refund claim solely based on the unavailability of the original contracts was deemed incorrect. The lower authorities failed to consider the certificates of the Garrison Engineers, which provide crucial information. The original adjudicating authority is directed to consider the certificates at face value and process the refund claim for each contract accordingly. The appeal was partly allowed through remand.

The appellant admitted that they were not entitled to a refund claim for contracts entered into after 2015. The impugned order rejecting the refund claim was set aside, and the matter was remanded to the original adjudicating authority for further consideration. The judgment highlights the importance of considering all relevant evidence, such as certificates from authorized entities, in processing refund claims, especially in cases where the full contract text cannot be disclosed due to legal restrictions. The decision emphasizes the need for a thorough examination of all available documentation to ensure fair and accurate adjudication of refund claims under the specified legal provisions.