C.C.E. & S.T.-Rajkot Vs Reliance Industries Limited (CESTAT Ahmedabad)
Conclusion: In present facts of the case, while dismissing appeal of the Revenue, the Hon’ble CESTAT observed that substantial benefit provided by Notifications can’t be denied on procedural lapse.
Facts: The brief facts of the case are that the respondent being an SEZ Unit had filed refund claims under Notification No. 12/2013-ST dated 01.07.2013 claiming refund of service tax paid to the service providers of taxable services received by them for carrying out authorized operations in their SEZ unit, service tax paid under reverse charge mechanism for the taxable services received for carrying out authorized operations in SEZ and also refund of service tax distributed to SEZ Unit under ISD Invoices under Rule 7 of Cenvat Credit Rules, 2004. The adjudicating authority vide Order-In-Original sanctioned refund claims for the entire amount claimed by the respondent. Being aggrieved by the Order-In-Original, the department has preferred appeal before the learned Commissioner (Appeals), who upheld the Order-In-Original and rejected the appeal filed by the department. Therefore, the present appeal filed by the revenue for the part amount out of the refund allowed by the learned Commissioner (Appeals), the revenue’s grounds of appeals made in the appeal memo are summarized below:-
(a) That requirement of Para 3 (III)(f) is not satisfied as the respondent had filed more than one refund claim for each quarter.
(b) The reasons assigned for condoning delay beyond one year as required by Para 3(III)(e) are not cogent and valid.
(c) The Deputy Commissioner had not verified the correctness of the distribution of Cenvat Credit made by the ISD in favour of the SEZ Unit through ISD Invoices.
(d) The Deputy Commissioner had no means of verifying the correctness of respondent’s assertion that the delay beyond one year from the date of payment to the registered service provider. As such this error shows that the refund was sanctioned without verification of documents.
(e) The lower authorities adopted an incorrect approach when dealing with the exemption notification and ignored the settled law which prescribes that condition in exemption notification ought to be directly construed consistent with the principles established by Constitution Bench of the Hon’ble Supreme Court in the case of COMMISSIONER OF CUSTOMS (IMPORT) MUMBAI Vs. DILIP KUMAR AND CO. Reported in 2018 (361) ELT 577 (SC)
The Hon’ble CESTAT after taking consideration of the submissions from both sides have observed that the respondent have admittedly filed only one refund claim for each quarter therefore, it cannot be said that the respondent have filed more than one claim in each quarter. Secondly in the facts, that the respondent have filed refund claim in quarter July 2017 to September 2017 which includes the claim of the invoices which are for the period from August 2013 to October 2017 even if, it is assumed that the refund claim for the part of the invoices which were pertaining to earlier quarter filed in the quarter July 2017 to September 2017 only on this ground, refund cannot be denied.
