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2021 (10) TMI 642 - AT - Service TaxSEZ units - refund of service tax paid on input services used in the authorized operations - rejection of claim on the ground that the refund claim is filed beyond the time-limit of one year from the date of payment of Service Tax - Chartered Accountant certificate not signed by the statutory auditor - services included in the specified list of services or not - original invoices have not been submitted - applicability of N/N. 09/2009-ST dated 03.03.2009, as amended vide N/N. 15/2009-ST dated 20.05.2009 superseded by N/N. 17/2011-ST dated 01.03.2011. Rejection on the ground of time limitation - HELD THAT - It is not disputed that all claims had been filed on or before the last date for filing the refund claims. These were returned by issuing Deficiency Memo since the appellant had not furnished necessary documents - It can be seen from the Deficiency Memo that the refund claim is returned to the appellant. There is no decision on merits; there is no application of mind or a speaking order rejecting the claim. In the present case, the appellant has filed the refund claims originally within a period of one year and therefore, the date on which the claims were re-submitted along with documents cannot be considered to be the date of filing claim so as to deny the refund on the ground of limitation - The Tribunal in the case of BALMER LAWRIE CO. LTD. VERSUS COMMISSIONER OF C. EX., KOLKATA-VI 2014 (8) TMI 977 - CESTAT KOLKATA considered a similar issue and held that when the claim has been filed within the limitation period of one year and returned by the Department for removal of defects, the date of subsequent re-submission cannot be taken as the date on which the claim is filed afresh. This issue as to whether the terms and conditions prescribed in the Service Tax Notifications will prevail over Section 26 of the SEZ Act, 2005 read with Section 51 of the SEZ Act, 2005 was analysed by the Hon ble High Court of Telangana and Andhra Pradesh in the case of GMR AEROSPACE ENGINEERING LIMITED AND ANOTHER VERSUS UNION OF INDIA AND OTHERS 2019 (8) TMI 748 - TELANGANA AND ANDHRA PRADESH HIGH COURT . This Tribunal in the case of M/S. TVS LOGISTICS SERVICES LTD. VERSUS THE PRINCIPAL COMMISSIONER OF SERVICE TAX CHENNAI SOUTH COMMISSIONERATE 2021 (8) TMI 450 - CESTAT CHENNAI has applied the above decision of the Hon ble High Court of Telangana and Andhra Pradesh and held that Section 51 of the SEZ Act, 2005 has an overriding effect. The denial of the benefit of exemption by relying upon procedural requirement of a Notification would be against the provisions laid down in the SEZ Act. The terms and conditions of the Notifications (04/2004-ST, 09/2009-ST and 17/2011-ST, as applicable for different periods) cannot be pressed into application to deny the substantive benefit of exemption enshrined in Section 26 of the SEZ Act, 2005 - the rejection of refund claims on the ground of being time-barred cannot sustain and requires to be set aside. Rejection on the ground that the auditor s certificate is not signed by the statutory auditor who was engaged during the period when the refund is claimed - HELD THAT - Learned Consultant for the appellant has explained that the auditor s certificate has been issued by M/s. Price Waterhouse Co. who were engaged at the time of filing the applications for claiming refund, who were the statutory auditors at that point of time - When the statutory auditor has given the certificate, there are no error so as to deny the refund on the allegation of the certificate not being issued by the proper person as required in the Notification. The rejection of refund claims on this ground is set aside. Rejection of refund on the ground that the services are not used for authorized operations - HELD THAT - When the services have been approved for authorized operations by the authority competent to do so, then the Department cannot deny the refund stating that it does not appear that the services are used for authorized operations. The view taken by the authorities below to deny the refund is not supported by any cogent reasons - the rejection of refund on this ground is not justified. Rejection on the ground of non-submission of original invoices - HELD THAT - The appellant asserts that they have produced the photocopies of all the invoices. The requirement as per the Notification is to produce proof of payment of Service Tax. If the photocopies of the invoices establish the transaction as well as the payment of Service Tax, the Department ought not to have rejected the refund claim stating that original invoices are not produced. We therefore cannot agree with this view taken by the authorities below. If the appellant produces proof of payment of Service Tax, the same should be considered - this issue is remanded to the Adjudicating Authority, who shall re-consider this issue after verifying the copies of the invoices/documents produced by the appellant. The appeals are partly allowed and partly remanded.
Issues Involved:
1. Time-barred refund claims. 2. Auditor’s certificate not signed by the statutory auditor engaged during the relevant period. 3. Services not included in the list of specified services for authorized operations. 4. Non-submission of original invoices. Detailed Analysis: 1. Time-barred Refund Claims: The appellant argued that the refund claims were filed within the statutory period and were returned by the Department for additional documentation. The appellant contended that the date of initial filing should be considered for limitation purposes, citing Clause 3(e) of Notification No. 12/2013-ST and several judicial precedents. The Department countered that the claims were resubmitted after significant delays without requisite documents, making them time-barred. The Tribunal noted that the claims were initially filed within the prescribed period and were returned for lack of documents without a decision on merits. Citing judicial precedents and CBEC Circular No. 1063/2/2018-CX, the Tribunal held that the date of original filing should be considered for computing the limitation period. Furthermore, the Tribunal emphasized that Section 26 of the SEZ Act, 2005 provides an absolute exemption from taxes, and the conditions in the Notifications issued under Section 93 of the Finance Act, 1994 cannot override this exemption. Consequently, the rejection of refund claims on the ground of being time-barred was set aside. 2. Auditor’s Certificate Not Signed by the Statutory Auditor Engaged During the Relevant Period: The appellant explained that the certificate was issued by M/s. Price Waterhouse & Co., who were the statutory auditors at the time of filing the refund applications. The Tribunal found no error in the statutory auditor issuing the certificate at the time of filing the claims and set aside the rejection of refund claims on this ground. 3. Services Not Included in the List of Specified Services for Authorized Operations: The appellant argued that all services were used for authorized operations and approved by the Unit Approval Committee (UAC) / Development Commissioner of SEZ. The Tribunal held that once services are approved for authorized operations by the competent authority, the Department cannot deny the refund on the grounds that the services do not appear to be used for authorized operations. The rejection of refund on this ground was set aside. 4. Non-submission of Original Invoices: The appellant asserted that photocopies of invoices were submitted and that original invoices were available but difficult to correlate due to multiple premises. The Tribunal noted that the Notification requires proof of payment of Service Tax and that photocopies establishing the transaction and tax payment should suffice. However, the Tribunal remanded this issue to the Adjudicating Authority for re-consideration after verifying the copies of invoices/documents produced by the appellant. Conclusion: The appeals were partly allowed and partly remanded, with the Tribunal setting aside the rejections on grounds of time-bar, auditor’s certificate, and non-specified services, while remanding the issue of original invoices for further verification. The order was pronounced in open court on 13.10.2021.
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