2021 (7) TMI 633 - AT - Service Tax

Refund of service tax paid - refund arose as a consequence of introduction of Section 104 of the Finance Act w.e.f. 31.03.2017 - rejection on the ground of non-submission of necessary documents - requirements under Section 11B of the Central Excise Act, 1944 as made applicable to Finance Act, 1944 vide Section 83 of the Act not complied with - N/N. 41/2016 dated 22.09.2016 - HELD THAT - N/N. 41/2016 dated 22.09.2016 has exempted taxable service provided by the State Government Industrial Development Corporation/Undertakings to industrial units by way of granting long term lease on industrial plot from so much of service tax leviable thereon under Section 66B of the said Act, as is leviable on the one time upfront amount payable for such lease. Vide Section 104 (1), exemption was provided from said services for the period from 01.06.2007 to 21.09.2016 and it was provided that the refund claim should be filed within a period of six months from the date from which Finance Act, 2017 is promulgated and come into force. In the present case, the appellant filed the refund claim within time and the only ground for which the refund was rejected by the Original Authority and upheld by the Appellate Authority is that the appellant did not produce sufficient documents in the form of invoices/bills showing that they have paid the service tax to KINFRA. During the pendency of the appeal, the appellant filed various invoices/bills issued by KINFRA showing the payment of service tax by the appellant for which the refund claim has been filed by the appellant. Further KINFRA has also issued a certificate dated 02.02.2021 certifying that they have not availed any CENVAT credit on the service tax paid by the appellant. Further, these bills/invoices issued by KINFRA clearly show the payment of service tax by the appellant to KINFRA and KINFRA in turn has paid the same to the Government. Though these invoices/bills were not produced before the Original Authority but various Challans issued by KINFRA were produced along with worksheets showing the payment of service tax to KINFRA by the appellant. In view of the facts that now the appellants have produced sufficient documents to prove the payment of service tax, there are no justification for rejection of the refund claim - appeal allowed - decided in favor of appellant.

Summary

Issues:
Refund claim rejection based on non-submission of necessary documents.

Analysis:
The appellant filed a refund claim under Section 104 of the Finance Act, 2017, for services exempt from service tax under Notification No.41/2016. The claim was rejected by the Deputy Commissioner and the Commissioner (Appeals) due to non-submission of required documents. The appellant argued that Section 104 is a special provision overriding general provisions like Section 83 of the Finance Act, 1994, and that they had provided evidence of tax payment to KINFRA. The appellant contended that the application was timely, and they had not passed the tax burden to others. The appellant cited legal precedents to support their arguments. The Authorized Representative defended the rejection based on document non-submission.

Upon review, the Tribunal found that the refund claim arose from Section 104 of the Finance Act, introduced in 2017. The exemption under Notification No.41/2016 covered services provided by State Government entities, and the refund claim deadline was met by the appellant. The sole reason for rejection was insufficient documentation of tax payment to KINFRA. During the appeal, the appellant submitted invoices and bills from KINFRA, along with a certificate confirming no CENVAT credit claimed. These documents demonstrated tax payment by the appellant to KINFRA, who then paid it to the Government. Although not initially presented, various KINFRA-issued challans and worksheets supported the tax payment.

Considering the newly submitted evidence proving tax payment, the Tribunal overturned the rejection of the refund claim, ruling in favor of the appellant. The impugned order was set aside, and the appeal was allowed.