2020 (5) TMI 290 - AT - Service Tax

Tribunal grants appeal for late refund claim due to service provider's actions.

M/s. Suprajit Engineering Ltd. Versus Commissioner of GST & Central Tax, Chennai Outer Commissionerate

The Tribunal allowed the appeal in a case concerning a refund claim filed beyond the prescribed time limit under Section 104 of the Finance Act, 2017. The ... Refund of service tax - retrospective exemption - Period of limitation of 6 months - amount which was collected by the service provider SIPCOT (State Industries Promotion Corporation of Tamil Nadu Ltd., A Govt. of Tamil nadu Undertaking) on development charges - Department was of the view that the refund claimed 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:- The issue decided in the case of M/S. TEKNOMEC VERSUS COMMISSIONER OF GST &CENTRAL EXCISE, CHENNAI [2019 (7) TMI 1416 - CESTAT CHENNAI] where it was held that rejection of refund claim on the ground of time bar is unjustified - rejection of refund set aside - appeal allowed - decided in favor of appellant. Issues:Refund claim filed beyond the prescribed time limit under Section 104 of the Finance Act, 2017.Analysis:The appellant filed a refund claim for the amount collected by the service provider SIPCOT on development charges, amounting to Rs. 14,36,000. The department contended that the refund claim should have been filed within six months from the date when Section 104 of the Finance Act, 2017 received the President's assent. The appellant argued that SIPCOT delayed informing them to file the refund claim directly, leading to the delay in filing. The Tribunal noted that Section 104 does not specify who can file the refund claim, and the delay was due to SIPCOT's actions. The Tribunal referred to a similar case where delay caused by external factors was considered for computing the period of limitation. The Tribunal held that the rejection of the refund claim based on time-bar was unjustified, and the appeal was allowed with consequential reliefs.The Tribunal analyzed Section 104 of the Finance Act, 2017, which mandates the filing of refund claims within six months from the date of the President's assent to the Finance Bill. The appellant filed the refund claim after the specified date due to delays caused by SIPCOT, the service provider. The Tribunal emphasized that the statute does not specify who can make the refund application, leading to ambiguity. Referring to a relevant High Court decision, the Tribunal highlighted that delays caused by external factors beyond the appellant's control should be excluded when computing the limitation period for filing refund claims. The Tribunal concluded that the rejection of the refund claim based on the time limit was unwarranted, and the appeal was allowed.In a detailed analysis, the Tribunal compared the present case with a precedent where delays in obtaining necessary certificates were considered for computing the limitation period for refund claims. The Tribunal noted that the appellant's delay in filing the refund claim was due to SIPCOT's actions and that the appellant had promptly filed the claim upon being informed by SIPCOT. The Tribunal reiterated that the statute's silence on who can file the refund claim created ambiguity, and delays caused by external factors should be taken into account. Relying on the principle that no person can be expected to perform a task beyond their control, the Tribunal held that the rejection of the refund claim on the grounds of being time-barred was unjustified. The Tribunal allowed the appeal and provided consequential reliefs, if any, as per the law.