2018 (11) TMI 832 - AT - Service Tax

SEZ unit - refund claim - appellants could not produce all the documents necessary to substantiate their claims of refund. Held that - It is not in dispute that the appellant has not able to fulfilled all the conditions for claiming the refund inasmuch as he has not provided the documentary evidence before the Original Authority as well as the First Appellate Authority to fully justify their refund claim and hence part of their refund claims were rejected - there is no merits in the grounds of appeal which seek to draw a distinction between the procedural requirements and substantial requirement of a notification. Considering the both sides of the arguments and that the appellant is an exporter claiming benefit of the exemption notifications (although they were careless in not producing the documents before the First Appellate Authority and Original Authority), this is a fit case to be remitted back to the Original Authority to examine the additional documents provided by the appellant and decide the refund claims on merit. Appeal allowed by way of remand.

Summary

Issues Involved:
1. Non-fulfillment of conditions for refund claims.
2. Submission of necessary documents to substantiate refund claims.
3. Interpretation of procedural versus substantial requirements of exemption notifications.

Detailed Analysis:

Issue 1: Non-fulfillment of Conditions for Refund Claims
The appellant, a SEZ unit, filed multiple refund claims under various exemption notifications. The officers found defects in the claims, which were not fully rectified by the appellant. Consequently, show cause notices were issued, and the claims were partly sanctioned. The First Appellate Authority allowed partial relief based on the documents provided. The appellant is now seeking the amounts disallowed by the First Appellate Authority.

Issue 2: Submission of Necessary Documents to Substantiate Refund Claims
The appellant admitted deficiencies in the refund claims and the inability to produce all necessary documents within the given time frames. The appellant now claims to have compiled all required documents and bank statements to justify each refund claim. The detailed table in the judgment highlights the amounts claimed, sanctioned, and rejected, along with the reasons for rejection, primarily due to the non-submission of relevant documents and proof of payment of service tax to the service providers.

Issue 3: Interpretation of Procedural versus Substantial Requirements of Exemption Notifications
The appellant argued that procedural lapses should not outweigh substantive compliance. However, the Departmental Representative and the judgment referenced the Hon'ble Supreme Court’s Constitution Bench decision in M/s Dilip Kumar and Company, which mandates strict interpretation of exemption notifications. The judgment emphasized that any benefit of doubt should favor the Revenue, not the assessee.

Conclusion:
The Tribunal acknowledged that the appellant failed to fulfill all conditions for claiming refunds due to the lack of documentary evidence. The Tribunal did not agree with the appellant's argument that procedural requirements should be set aside in favor of substantive compliance, citing the Supreme Court's decision in M/s Dilip Kumar and Company. Nevertheless, considering the appellant's status as an exporter and their claim of now having all necessary documents, the Tribunal found it appropriate to remit the case back to the Original Authority for re-examination of the additional documents and to decide the refund claims on their merits.

Order:
The appeals are allowed by way of remand to the Original Authority for reconsideration based on the newly provided documents. The order was pronounced and dictated in open court.