2019 (3) TMI 954 - AT - Service Tax

Refund of service tax - rejection on the ground of time limitation - Held that - Notification No. 40/2012 ST dated 29.06.2012 exempts the services on which service tax is eligible under Section 66b of the said Act received by a unit allocated in Special Economic Zone (SEZ) or developer of SEZ and used for authorised operation from the whole of the service tax education cess and secondary and higher education cess leviable thereupon. The said exemption is amended to have been provided by way of refund of service tax paid specified services received by the SEZ unit or the developer of SEZ and use for the authorised operations however subject to the conditions as mentioned therein including that the claim especially be filed within one year from the end of the month in which actual payment of service tax was made by such SEZ unit or developer of SEZ to the registered service provider or such extended period as the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, shall permit. Admittedly the refund claim was filed beyond the time limit as prescribed above. Admittedly there was no former Application seeking condonation of the said delay except the oral submission of appellant before adjudicating authority below about shortage of staff - the said plea of the appellant has duly been dealt with in the Order under challenge holding the said explanation is not satisfactory as the appellant was otherwise running business and all other operations pertaining to their business - Once the said eligible criteria has not been made with or any condition pre-requisite for the said benefit has not been made that the benefit of exemption Notification cannot be made available to the assessee. Appeal dismissed.

Summary

Issues Involved:
1. Refund claim filed beyond the prescribed time limit under Notification No. 40/2012 - ST.
2. Interpretation of conditions for claiming refund under the exemption Notification.
3. Consideration of delay in filing the refund claim.
4. Applicability of strict interpretation of exemption Notification conditions.

Issue 1: Refund claim filed beyond the prescribed time limit under Notification No. 40/2012 - ST:
The appellant filed refund claims for service tax under Notification No. 40/2012 - ST, which were rejected due to being filed beyond the one-year time limit from the end of the month in which the service tax payment was made. The appellant contended that the delay should be condoned based on a Supreme Court decision emphasizing consideration for litigants unless malafides are evident. The Department argued that the condition for filing within the specified time was crucial for claiming the refund.

Issue 2: Interpretation of conditions for claiming refund under the exemption Notification:
The Tribunal noted that Notification No. 40/2012 - ST exempted specified services from service tax for SEZ units, subject to conditions, including filing refund claims within the stipulated time. The conditions were to be strictly followed for claiming the benefit, as established by previous court decisions. The Tribunal emphasized that fulfilling the eligibility criteria and conditions were essential for availing the exemption benefits.

Issue 3: Consideration of delay in filing the refund claim:
The appellant's explanation for the delay, citing staff shortage, was found unsatisfactory as no formal application for condonation was made. The Tribunal highlighted that strict adherence to the time limit was necessary, as per the settled principle of interpreting exemption Notifications. The Tribunal upheld the rejection of the refund claims due to the delay in filing, as the conditions were not met within the prescribed period.

Issue 4: Applicability of strict interpretation of exemption Notification conditions:
Relying on the Supreme Court's stance on interpreting exemption Notifications strictly, the Tribunal affirmed that the conditions outlined in the Notification must be strictly adhered to. Any failure to meet the eligibility criteria or conditions would result in the denial of exemption benefits. The Tribunal upheld the dismissal of the appeals, emphasizing the importance of complying with the Notification's conditions as per legal precedents.

In conclusion, the Tribunal upheld the rejection of the refund claims due to the delay in filing, emphasizing the need for strict compliance with the conditions specified in the exemption Notification. The decision highlighted the significance of meeting the eligibility criteria and filing requirements within the prescribed time limit to avail of exemption benefits under the Notification.