Tribunal allows appeals on refund claims, emphasizes filing date for limitation period

The Tribunal partly allowed the appeals, setting aside the rejections based on time-barred refund claims, auditor's certificate, and services not included in the list of specified services for authorized operations. The issue of non-submission of original invoices was remanded for further verification by the Adjudicating Authority. The Tribunal emphasized the importance of considering the date of original filing for computing the limitation period and highlighted the absolute exemption from taxes under Section 26 of the SEZ Act, 2005.

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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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