2024 (7) TMI 110 - AT - Service Tax

Applicability of the time limit as per section 11B read with section 83 of the Finance Act 1994, for a refund filed under N/N. 4/2004-ST dated 31/03/2004 - adopting the procedure under N/N. 9/2009-ST dated 03/03/2009 - non-availability of list of approved services from the approval committee along with the refund claim as per Notification No. 9/2009-ST dated 03/03/2009. Applicability of the time limit as per section 11B read with section 83 of the Finance Act 1994, for a refund filed under N/N. 4/2004-ST dated 31/03/2004, on 30.9.2009, for the period October 2008 to 02.03.2009, by adopting the procedure under N/N. 9/2009-ST dated 03/03/2009 - HELD THAT - The notification gives unconditional exemption to taxable services provided to a developer/ SEZ unit. Hence any excess paid duty can be claimed as a refund under section 11B within the time limit stated in the section. Even if the provisions of notification no. 9/2009-ST dated 03/03/2009 is (incorrectly) sought to be applied to the claim for the period prior to 03/03/2009 and the claim treated as time barred in the light of the six months time limit set by the notification, it will not be legally correct - In the light of the judgment of Supreme Court in SONY INDIA PVT. LTD. VERSUS THE COMMISSIONER OF CUSTOMS 2014 (4) TMI 870 - DELHI HIGH COURT clarifying the legal position, it is clear that a period of limitation mandated through a notification cannot prevail over the statutory period - there are no error in the impugned order and uphold the same. Non-availability of list of approved services from the approval committee along with the refund claim as per N/N. 9/2009-ST dated 03/03/2009, (from 03/03/2009 upto June 2009), which is a mandatory requirement as per the notification - HELD THAT - It is found that the respondent is silent about the same. The said condition is a mandatory one affecting the essence or substance of the said notification granting exemption. A Constitution Bench of 5 Judges in the case of CCE VERSUS M/S HARI CHAND SHRI GOPAL 2010 (11) TMI 13 - SUPREME COURT held that ' A provision providing for an exemption, concession or exception, as the case may be, has to be construed strictly with certain exceptions depending upon the settings on which the provision has been placed in the Statute and the object and purpose to be achieved. If exemption is available on complying with certain conditions, the conditions have to be complied with. The mandatory requirements of those conditions must be obeyed or fulfilled exactly, though at times, some latitude can be shown, if there is a failure to comply with some requirements which are directory in nature, the non-compliance of which would not affect the essence or substance of the notification granting exemption.' It is found that detailed procedures laid down in the notification are to curb the diversion and misutilization of goods which are otherwise taxable. Hence as stated in the Apex Courts judgement above it is essential for the respondent to show compliance. Unfortunately, the impugned order and the reply filed by the respondent are silent on this aspect - a substantive benefit should not be denied without giving an opportunity to show that they have complied with the said condition of the notifications or not - it is found proper to remand the matter to the lower authority to examine this matter alone and decide the issue on merits. The applicability of the time limit as per section 11B or a refund claim governed by Notification No. 04/2004-ST for the period up to 02/03/2009 accepted and impugned order upheld - matter remanded back to the Original Authority for de novo adjudication - appeal disposed off by way of remand.

Summary

Issues:
1. Applicability of time limit for refund claim under Notification No. 4/2004-ST dated 31/03/2004.
2. Compliance with the requirement of providing a list of approved services from the approval committee along with the refund claim under Notification No. 9/2009-ST dated 03/03/2009.

Analysis:

Issue 1: Applicability of time limit for refund claim under Notification No. 4/2004-ST dated 31/03/2004:
The appeal was filed by the Commissioner of GST against the Order in Appeal No. 320/2013 (MST) dated 20.11.2013. The respondent, a SEZ unit, filed a refund claim under section 11B of the Central Excise Act, 1944 for service tax paid on specified services from October 2008 to June 2009. The department rejected the refund claim citing Notification No. 9/2009-ST dated 3.3.2009, stating that services prior to this date were not eligible for refund. The Commissioner (Appeals) allowed the respondent's appeal. The appellant argued that the claim was time-barred as per the notification. However, the Tribunal held that a period of limitation mandated through a notification cannot prevail over the statutory period. Citing legal precedents, the Tribunal upheld the impugned order, stating that the time limit set by the notification was legally incorrect.

Issue 2: Compliance with the requirement of providing a list of approved services under Notification No. 9/2009-ST dated 03/03/2009:
Regarding the respondent's failure to provide the list of approved services from the approval committee along with the refund claim, the Tribunal found this to be a mandatory requirement affecting the essence of the notification granting exemption. Quoting a Supreme Court judgment, the Tribunal emphasized that a person claiming exemption must establish entitlement by complying with conditions strictly. As the respondent did not address this aspect, the Tribunal remanded the matter to the lower authority for examination. The lower authority was instructed to afford the respondent a reasonable opportunity to demonstrate compliance with the condition and issue a speaking order on the matter within a specified time frame.

In conclusion, the Tribunal accepted the time limit for the refund claim under Notification No. 4/2004-ST but remanded the issue of compliance with the list of approved services back to the lower authority for further assessment. The appeal was disposed of with modifications, granting the respondent an opportunity to rectify the compliance issue within a stipulated timeframe.