2023 (8) TMI 254 - AT - Service Tax

Refund of service tax paid - invoice/bill issued by KINFRA is produced for the claim of refund under Section 104 of the Finance Act, 2017 or not - the documentary evidence to establish that cenvat credit has not been availed is satisfied or not - appellant paid upfront amount on long term lease with Service Tax to KINFRA, who in turn paid the service tax to the Government - service was exempt by insertion of Section 104 in Chapter V of Finance Act 1994 with retrospective effect. 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 Notification No. 41/2016 dated 22.09.2016 has exempted taxable service provided by the State Government Industrial Development Corporation/Undertakings to the industrial units by way of granting long term lease of industrial plots from so much of service tax leviable thereon under 66B of the Finance Act, 1994 as is leviable on the one time upfront amount payable for such lease. Vide Section 104(1) exemption is provided for such services for the period from 01.06.2007 to 21.09.2016 and it has also provided that the refund claim should be filed within 6(six months) from the date on which the Finance Act, 2017 receives the assent of the President. In this case, it is found that the appellant has filed refund claims in time. The reasons why the refund claims have been rejected by the original authority and upheld by the first appellate authority is that the appellants did not produce the documents namely invoices/bill evidencing that they have paid service tax through KINFRA and non availment of Cenvat credit - The invoices produced by the appellants during the pendency of the appeals clearly show that they have paid the service tax to KINFRA, who in turn paid the same to the Government. Further, they have submitted a certificate from a Chartered Accountant to the effect that Cenvat credit has not been availed and that it has not been passed on to others. The appellants have now produced sufficient documents to prove that they have paid the service tax and have not availed or passed on the Cenvat credit, there are no justification in the rejection of refund claim - appeal allowed.

Summary

Issues Involved:
The judgment involves the interpretation of Section 104 of the Finance Act, 1994 with retrospective effect, specifically regarding the exemption and refund provisions related to service tax on one-time upfront amounts for long-term leases of industrial plots provided by State Government Industrial Development Corporations or Undertakings.

Issue (a):
The first issue in the appeal was whether the appellant had produced the invoice/bill issued by KINFRA for the claim of refund under Section 104 of the Finance Act, 2017. The appellant initially did not have the invoice but later obtained it from KINFRA, submitting it along with the lease agreement, payment receipts, and a declaration from KINFRA confirming the payment of service tax to the Government. The appellant argued that the production of the invoice was crucial for the refund claim, citing precedents where similar cases were decided in favor of the appellants upon the production of invoices.

Issue (b):
The second issue raised was whether the appellant had provided sufficient documentary evidence to establish that Cenvat credit had not been availed. The appellant, not being registered under Service Tax Law or Excise Laws, contended that the question of availing Cenvat credit did not apply to them. They supported this claim with a certificate from a Chartered Accountant confirming the non-availment and non-passage of Cenvat credit.

The judgment analyzed the provisions of Section 104 of the Finance Act, 1994, which exempted service tax on one-time upfront amounts for long-term industrial leases provided by State Government entities. The appellant had filed a refund claim for service tax paid on such a lease, which was rejected by the adjudicating authority and upheld by the first appellate authority due to the non-submission of required documents, namely invoices/bills and proof of non-availment of Cenvat credit. However, during the appeal, the appellant provided the invoices from KINFRA showing payment of service tax and a certificate confirming the non-availment of Cenvat credit. The tribunal found that the appellant had filed the refund claim in time and had now produced sufficient evidence to support their claim. Consequently, the tribunal set aside the previous orders and allowed the appeal with consequential relief.