Appeals allowed for service tax refund on industrial land lease payments. Section 104 retrospective application rejected.

The appeals were allowed with consequential benefits as the Bench found that the appellants provided sufficient documents to prove the payment of service tax on long term lease of industrial lands. The refund claims were rejected based on the retrospective introduction of Section 104 of the Finance Act, but the Bench noted that the appellants filed timely refund claims and submitted evidence of service tax payment. Therefore, the impugned orders were set aside, and the appeals were allowed in favor of the appellants.

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Issues:
Appeals against Orders-in-Appeal related to refund of service tax on long term lease of industrial lands.

Analysis:
The appeals were filed against Orders-in-Appeal dated 05/04/2021 and 13/07/2020 passed by the Commissioner of Central Tax, Central Excise & Customs, Cochin. The appellants had taken industrial lands on long term lease from Kerala Industrial Infrastructure Development Corporation (KINFRA) by paying an upfront amount with service tax. The introduction of Section 104 into Chapter V of the Finance Act, 1994 with retrospective effect led to refund requests for the service tax paid on the upfront amount. The rejection of the refund requests was challenged in the present appeals.

Both parties agreed that a similar issue was resolved in favor of the taxpayer in a previous case by the Bench. The Bench found that the refund claims arose due to the introduction of Section 104 of the Finance Act. Notification No. 41/2016 exempted taxable services provided by State Government Industrial Development Corporation from service tax on long term lease of industrial plots. The Bench noted that the appellants filed refund claims within the stipulated time and submitted invoices/bills showing payment of service tax to KINFRA. Despite these documents not being produced before the Original Authority, various challans and worksheets demonstrated the payment of service tax.

The Bench concluded that since the appellants provided sufficient documents to prove the payment of service tax, there was no justification for rejecting the refund claims. Therefore, the impugned orders were set aside, and the appeals were allowed with consequential benefits as per law. The orders were pronounced in the Open Court on 01/04/2022.

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