2022 (1) TMI 865 - AT - Service Tax

Tribunal Upholds Rejection of Refund Claim for Service Tax, Emphasizes Timely Filing

The Tribunal upheld the rejection of the appellant's refund claim for service tax paid on development charges, citing the claim as time-barred due to a ... Refund for the service tax - development charges - time limitation - appeal was rejected as it was filed beyond the prescribed time limit of six months - HELD THAT:- It is seen that the service tax has been paid on 20.8.2014. Appellant also availed CENVAT credit on the same. After the introduction of GST, the appellant carried forward the credit to TRAN-1 credit and reflected the same in the TRAN-1 filed by them. After introduction of section 104 by Finance Act, 2017 whereby exemption from service tax was provided on development charges by way of grant of refund, SIPCOT had issued a letter to the appellant informing the appellant to file the refund claim. The due date for filing the refund claim, as per the provisions contained in 104(3) of Finance Act, 2017 is 30.9.2017. The appellant received the letter from SIPCOT on 11.9.2017. However, the refund claim has been filed by the appellant only 26.11.2018 which is beyond the period of one year. It is clear that the refund claim has been filed within a reasonable time and without much delay after receiving intimation from SIPCOT. In the present case, there is inordinate delay after receiving intimation from SIPCOT on 11.9.2017. For these reasons, these decisions are distinguishable on facts and not applicable to the case on hand - In the case of JPG CONSTRUCTION PVT LTD. VERSUS COMMISSIONER OF GOODS & SERVICE TAX [2021 (2) TMI 367 - CESTAT NEW DELHI], which is a decision relied by learned AR, it has to be noted that the refund claim in that case is one under section 102 and not under section 104. Under section 102, it is always the service provider who has to make the claims. There was no requirement to get document or certificates. The said case also would not be applicable to the facts. There is inordinate delay of more than one year from the intimation received from SIPCOT, the rejection of refund claim as time-barred is legal and proper - Appeal dismissed. Issues:- Rejection of refund claim for service tax paid on development charges- Time limitation for filing refund claim under section 104 of Finance Act, 2017- Applicability of non-obstante clause in section 104- Delay in filing refund claim- Interpretation of relevant legal provisionsAnalysis:1. The appellant filed a refund claim for service tax paid on development charges to SIPCOT, which was rejected due to being time-barred as it was filed beyond the prescribed six-month limit from the date of assent of the Finance Bill 2017.2. Section 104 of the Finance Act, 2017 provides for refund of service tax paid on development charges, with a time limit of six months from the date of assent of the President. The appellant was informed about this provision only 21 days before the due date for filing the refund claim.3. The non-obstante clause in section 104 excludes the applicability of service tax on one-time upfront amounts for long-term leases by State Government industrial undertakings. The provision for refund under section 104 prevails over Chapter VA, and the exclusion is limited to Chapter VA, not Chapter V.4. The appellant argued that the time limit for filing the refund claim is directory in nature, emphasizing that section 104 does not specify who can make the refund application, leading to confusion and delay in filing.5. Despite relying on previous decisions where refund claims were filed within a reasonable time after intimation, the delay of over a year in filing the refund claim after receiving intimation from SIPCOT led to the rejection of the claim as time-barred.6. The Tribunal upheld the rejection of the refund claim, noting the inordinate delay and distinguishing previous cases where claims were filed promptly after intimation. The delay of more than a year from the intimation was considered significant in dismissing the appeal.7. The judgment emphasized the importance of timely filing refund claims within the prescribed period, highlighting the legal and procedural implications of delays in claiming refunds under relevant provisions of the Finance Act, 2017.(End of analysis)