2016 (11) TMI 588 - AT - Service Tax

Rejection of Refund claim - time bar - SEZ unit - banking and other financial services - limitation of time to file the refund claim of service tax under Notification No.09/2009-ST dated 3.3.2009 - Held that - The discretionary powers given to the Assistant Commissioner has to be exercised by application of mind to the facts of the case. When the delay in filing the claim is sought to be condoned by the claimant, the competent Officer (here Assistant Commissioner) has to examine and decide whether such delayed claim can be accepted. The reasons for the same or for rejecting the request for condonation are to be recorded. There is no provision to have two separate proceedings in such cases viz., first to decide on delay/request for condonation and then on the refund claim per se. Both can be taken together and decided. This is done in various such situations in cases where delayed appeals etc., are taken up for decision. Rejection of refund claim justified - appeal dismissed - decided against appellant.

Summary

Issues:
1. Timeliness of filing a refund claim under Notification No.9/2009-ST.
2. Condonation of delay in filing the refund claim.
3. Interpretation of discretionary powers of the Assistant Commissioner regarding time extension for filing refund claims.

Analysis:

Issue 1:
The appeal was filed by the Revenue against the order passed by the Commissioner (A) allowing the assessee's appeal and setting aside the Order-in-Original. The dispute revolved around the timeliness of filing a refund claim under Notification No.9/2009-ST by the assessee, a Special Economic Zone (SEZ) unit. The original authority rejected the refund claim as time-barred, as it was filed beyond the prescribed period of six months from the payment of service tax. The Revenue contended that the rejection was valid as per the notification's provisions.

Issue 2:
The assessee had requested to condone the delay in filing the refund claim, citing reasons such as unavailability of supporting documents within the time limit and the complexity of compiling and submitting voluminous documents under the new refund scheme. The Commissioner (A) allowed the appeal based on the contention that the time limit mentioned in Notification No.9/2009-ST is not absolute and can be extended before rejecting the refund claim. The Commissioner emphasized that the discretionary powers of the Assistant Commissioner should be used to decide on condonation of delay and the refund claim simultaneously, rather than as separate proceedings.

Issue 3:
The learned Commissioner (A) highlighted that the Assistant Commissioner's discretionary powers must be exercised by considering the facts of the case. The Assistant Commissioner should decide on accepting a delayed claim after examining the reasons for the delay and recording the decision. The Commissioner rejected the Revenue's argument that condonation of delay should be a separate process from the refund claim filing. The Commissioner upheld the impugned order, emphasizing that the discretionary powers must be applied judiciously and that both aspects can be considered together for a decision.

In conclusion, the Tribunal dismissed the Revenue's appeal based on the observations and reasoning provided by the Commissioner (A) regarding the timeliness of the refund claim filing and the discretionary powers of the Assistant Commissioner in extending the period for filing refund claims under Notification No.9/2009-ST.