2019 (11) TMI 246 - AT - Service Tax

Refund claim upheld despite delay; reliance on service provider key.

The Tribunal overturned the rejection of the refund claim based on limitation, emphasizing the appellant's reliance on the service provider for necessary ... Refund of service tax - time limitation - Department was of the view that the refund claim ought to have been filed within six months from the date on which Section 104 of Finance Act, 2017 was introduced and received assent of the President - HELD THAT:- Only if it is established by the appellant that the amount has been deposited by SIPCOT with the government, the appellant would be eligible for refund. For this, appellant has to get assistance from SIPCOT and only thereafter they would be able to file refund claim. In the present case, SIPCOT though was aware of the amendment by which the exemption to service tax on development chares was extended to the beneficiaries, has been in a slumber and has not taken any initiative to inform the beneficiary about the exemption. Had SIPCOT taken action within the time prescribed appellant would have filed the refund in time. Thus it established that delay was not due any reasons on the part of appellant. Hon'ble High Court in the case of JSW DHARMATAR PORT PVT. LTD., JSW JAIGARH PORT LTD. VERSUS UNION OF INDIA, THROUGH THE SECRETARY DEPARTMENT OF REVENUE, MINISTRY OF FINANCE [2018 (12) TMI 1118 - BOMBAY HIGH COURT] held that rejection of refund claim on the ground of time bar is unjustified. Appeal allowed - decided in favor of appellant. Issues:Refund claim rejection on the ground of limitation.Analysis:The case involved a refund claim filed by the appellant for an amount collected by the service provider as development charges. The Department dismissed the claim citing limitation, as it should have been filed within six months from the date the Finance Act, 2017 was introduced and received the President's assent. The Commissioner (Appeals) upheld the dismissal, leading the appellant to approach the Tribunal.The appellant argued that the service tax on development charges was exempted under Section 104(1) of the Finance Act, 2017, with a provision to file refund claims within six months of the amendment receiving assent. The appellant, as a service receiver, paid the tax to the service provider and was not informed timely about the exemption. Only after the service provider notified the appellant about the non-claim of refund did the appellant file the claim. The appellant needed documents from the service provider to establish the tax payment and eligibility for a refund.The Department contended that the refund claim filed after the prescribed six-month period was time-barred, as per the amended provisions of the Finance Act, 2017. The Department emphasized that the delay in filing the claim was beyond the legal limitation and supported the lower authorities' decision to reject the claim.The Tribunal analyzed the situation, considering the delay caused by the service provider's failure to inform the appellant about the exemption in a timely manner. Relying on a previous decision and the principle that exemption benefits should not be defeated by narrow interpretations, the Tribunal found the rejection of the refund claim on the grounds of time limitation unjustified. The Tribunal set aside the impugned order, allowing the appeal with consequential benefits as per the law.In conclusion, the Tribunal overturned the rejection of the refund claim based on limitation, highlighting the appellant's reliance on the service provider for necessary information and documents to support the claim. The delay in filing the claim was attributed to the service provider's inaction in informing the appellant about the exemption, leading to the Tribunal's decision in favor of the appellant.