2017 (7) TMI 839 - AT - Central Excise

Refund claim - Rent-a-cab service - whether second time filing of refund claim for the quarter for which the claim had already been filed earlier can be adopted as a ground for denial of credit or not? - Held that - the refund claim filed by the appellant in respect of Rent-a-Cab Service is beyond their control, in as much as, the said service was approved belatedly. As such, no fault can be found with the appellant s action. The notification, in substance, allows the refund of service tax so paid on SEZ Unit and denial of the same on the ground of violation of procedural requirements cannot be upheld. It is well settled law that the substantive benefits if otherwise available, should not be disallowed on the ground of violation of procedural conditions - reliance was placed in the case of WESTERN CANS P. LTD. Versus COMMISSIONER OF C. EX., MUMBAI-I 2011 (3) TMI 757 - CESTAT, MUMBAI - appeal allowed - decided in favor of appellant.

Summary

Issues involved: Refund claim for service tax paid on Rent-a-Cab Service in a Special Economic Zone; rejection of refund claim by Revenue based on procedural grounds and multiplicity of claims.

Analysis:
1. The appellant, a registered unit in a Special Economic Zone, filed a refund claim for service tax paid on specific services utilized for exporting goods as per Notification No.12/2013-ST. The claim did not include Rent-a-Cab Service initially, as it was not approved by the Committee during the relevant period but was later approved retrospectively from 01.07.2013.

2. The Revenue rejected the refund claim, citing two main grounds. Firstly, the appellant had already filed a refund claim for the quarter in question, and according to the notification, only one claim per quarter is allowed. Secondly, Rent-a-Cab Service was not initially approved by the Committee, leading to doubts about its eligibility as an input service in the SEZ.

3. The Commissioner (Appeals) acknowledged the retrospective approval of Rent-a-Cab Service but upheld the rejection of the appeals, emphasizing that filing a second refund claim for the same quarter, even for different services, was impermissible under the notification.

4. The appellant argued that the requirement of quarterly refund claims is procedural to prevent multiple proceedings and that the delayed approval of Rent-a-Cab Service warranted a separate claim. Citing precedent, they contended that substantive benefits should not be denied due to procedural issues.

5. The Tribunal, after considering the arguments, emphasized that the legislative intent behind quarterly claims was to avoid multiplicity, not to restrict claims to a specific frequency. The delay in approving Rent-a-Cab Service was beyond the appellant's control, and denying the refund based on procedural grounds would be unjust when substantive benefits were available.

6. Consequently, the Tribunal set aside the Revenue's order, allowing both appeals and granting relief to the appellant. The judgment underscored that substantive benefits should not be withheld due to procedural discrepancies, especially when the delay in compliance was not intentional.

This detailed analysis of the judgment highlights the key issues, arguments presented, and the Tribunal's reasoning leading to the decision in favor of the appellant regarding the refund claim for service tax paid on Rent-a-Cab Service in the Special Economic Zone.