TaxTMI 
TaxTMI 
2020 (4) TMI 308
X X X X Extracts X X X X
X X X X Extracts X X X X
....nt of India, Ministry of Finance, Department of Revenue is not applicable to the refund claims covered by Table-II of Form A-4 of Notification No. 12/2013-ST dated 01.07.2013. ii) Whether the Hon'ble Tribunal, was right to hold that the refund claim in respect of Table-II, Form A-4 of Notification No. 12/2013-ST dated 01.07.2013 has been correctly sanctioned by the Adjudicating Authority, as the Respondent has preferred the refund claim within one year from the date of ISD invoice issued in favour of SEZ Unit, which is a complete misreading of clause (e) of Para III of Notification No. 12/2013-ST dated 01.07.2013. iii) Whether the Hon'ble Tribunal was right to hold that the Adjudicating Authority has exercised discretion power to allow filing of refund claim beyond one year by the appellant, when Adjudicating Authority has not recorded any reasons/findings to condone such delay. iv) Whether the Hon'ble Tribunal has the power (or) jurisdiction to condone the delay in filing the refund claim as per clause (e) of the Para 3(III) of the Notification No. 12/2013-ST dated 01.07.2013, which is vested with the Assistant/Deputy Commissioner of Central Excise?" 2. Since th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d by the revenue. It was further contended that the limitation provided in clause (e) of paragraph 3(III) of Notification No.12/2013 of one year from the end of the month in which actual payment of service tax was made by the SEZ unit to the registered service provider, did not apply to refunds covered by Table-II of Form A-4. It was submitted that the services in respect of which refund was claimed under Table-II were common to the domestic tariff area units and the SEZ units, for which payment is made by the domestic tariff area unit to the registered service provider. In respect of such services, there was no privity of contract between the SEZ units and the registered service provider; consequently, the question of the SEZ unit making any actual payment to such registered provider did not arise. Thus, the event which is the starting point for calculating the limitation under clause (e) never occurred in respect of services covered under Table-II. It was further submitted that assuming for the sake of argument that clause (e) applies to services covered under Table-II, the order of the adjudicating authority does not deserve to be interfered with as he has adopted the consistent....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t the period of one year has to be calculated from the date of ISD invoice is not in consonance with clause (e) of paragraph 3(III) of Notification No.12/2014-Service Tax dated 01.07.2013 and rule 7 of the CC Rules. It was submitted that while the ISD invoice relates to the period 2014 to 2016, refund is claimed in this quarter. 4.1 Reference was made to clause (d) of rule 7 of the CC Rules which provides that the credit of service tax attributable as input service to all units shall be distributed to all the units pro rata on the basis of the turnover of such units during the relevant period to the total turnover of all the units, which are operational in the current year, during the said relevant period. The attention of the court was invited to the Explanation to rule 7 of the CC Rules, which reads thus: "Explanation 3.- for the purposes of this rule, the relevant period shall be- (a) if the assessee has turnover in the financial year preceding to the year during which credit is to distributed for month or quarter, as the case may be, the said financial year; or (b) If the assessee does not have turnover for some or all the units in the preceding financial year, the last....
X X X X Extracts X X X X
X X X X Extracts X X X X
....in one year from the end of the month in which actual payment of service tax was made, whereas in the case of the respondent, the refund claim was made beyond the period of one year from the end of the month in which actual payment of service tax was made. 4.5 It was, accordingly, urged that the appeal deserves to be admitted on the questions as proposed by the appellant or as may be formulated by this court. 5. On behalf of the respondent, Mr. Vipin Jain, learned counsel, invited the attention of the court to the contents of paragraph 9 of the impugned order passed by the Tribunal, to submit that there is no perversity in the finding of the Tribunal regarding the fact that rule 7 of the CC Rules does not provide for any limitation. The attention of the court was invited to subrule (1) rule 9 of the CC Rules, and more particularly clause (g) thereof, which reads thus: "9. (1) The cenvat credit shall be taken by the manufacturer or the provider of output service or input service distributor, as the case may be, on the basis of any of the following documents, namely:- Xxxx "(g) an invoice, bill or challan issued by an input service distributor under rule 4A of the Service Ta....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 25, 28(1) and 29, the expressions "permission" and "general or special permission" remain unqualified. The distinction made by Parliament between permission simpliciter and previous permission in the several provisions of the same Act cannot be ignored or strained to be explained away by us. That is not the way to interpret statutes. The proper way is to give due weight to the use as well as the omission to use the qualifying words in different provisions of the Act. The significance of the use of the qualifying word in one provision and its non-use in another provision may not be disregarded. In our view, the Parliament deliberately avoided the qualifying word previous in Sec. 29(1) so as to invest the Reserve Bank of India with a certain degree of elasticity in the matter of granting permission to non-resident companies to purchase shares in Indian companies. The object of the Foreign Exchange Regulation Act, as already explained by us, undoubtedly, is to earn, conserve, regulate and store foreign exchange. The entire scheme and design of the Act is directed towards that end. Originally the Foreign Exchange Regulation Act, 1947 was enacted as a temporary measure, but it was plac....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... court. It was urged that the appeal being devoid of merits deserves to be dismissed. 6. Before adverting to the merits of the case, reference may be made to the findings recorded by the Tribunal in the impugned order. A perusal of the impugned order reveals that the Tribunal has found arguments regarding inapplicability of clause (e) to be convincing but was not inclined to deal with the same, as it did not find any infirmity in the adjudicating authority having granted refund by following the practice and precedence set by his predecessors. The Tribunal took note of the fact that earlier orders following same approach have been accepted by the revenue and was of the view that this was rightly so, as the refund claims in respect of services covered in Table-II of Form 4-A can be made by an SEZ unit only after the input service distributor in the DTA distributes the tax pertaining to invoices under which services common to the SEZ and DTA units have been received; and that it is only after the input service distributor issues the invoice distributing the tax credit, that the SEZ unit is made aware of the tax liability pertaining to such invoices, of which it can claim refund. 6.1....
X X X X Extracts X X X X
X X X X Extracts X X X X
....a cases covered under Table-I of Form A-4 vis-à-vis those covered under Table-II of Form A-4, clearly reflects that the adjudicating authority has after due application of mind by condoning the delay permitted the filing of the claim in respect of cases covered under Table-II, even beyond one year from the end of the month in which actual payment of service tax was made to the registered service provider. 6.2 The Tribunal has further held that clause (e) of paragraph 3(III) of Notification dated 01.07.2013 does not contemplate giving reasons for condoning the delay in filing refund claims. Even if the adjudicating authority has not exercised the jurisdiction vested in it of condoning the delay, there is no warrant to remand the matter as the Tribunal can exercise such discretion as it finds on facts that there is a reasonable cause for such delay inasmuch as, in case of ISD invoices for all purposes, be it cenvat or refund, the ISD invoice is deemed to be taxpaying document and the date of that ISD invoice has to be taken even for computing the one year stipulated in the notification. Therefore, as long as the SEZ unit files the claim for refund within one year from the inp....
X X X X Extracts X X X X
X X X X Extracts X X X X
....set by his predecessors. 9. Insofar as proposed question (iii) is concerned, the controversy raised is whether the Tribunal was right in holding that the adjudicating authority has exercised discretion to allow filing of refund claim beyond one year by the respondent, when the adjudicating authority had not recorded any reasons to condone such delay. It may be pertinent to note that while the adjudicating authority has not assigned any reasons for extending the period for filing the refund claim, the Tribunal was of the view that the adjudicating authority has, in fact, exercised discretion as it has taken cognizance of the disclosure in the covering letter filed along with the refund claim, wherein, it has been stated that in respect of cases where refund was being claimed after distribution of credit by ISD, there were some instances where on the date of filing of the refund claim, the payment date to the service provider by the ISD invoice of common services was beyond one year from the date of such payment. According to the Tribunal, the adjudicating authority was conscious of this fact which reflects application of mind to the factor of delay and shows that it has condoned th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....xcise? On behalf of the appellant it has been contended that the discretion to extend the time is vested in the Assistant/Deputy Commissioner of Central Excise, and if such authority has not exercised its discretion, it is not permissible for the Tribunal to do so. In this regard, the learned counsel for the respondent placed reliance upon the decision of a Full Bench of the Madras High Court in State of Tamil Nadu v. Arulmurugan and Company, (1982) 51 STC 381 (FB). In that case the Full Bench was called upon to decide the question as to whether an appellate authority can entertain C form declarations filed by a registered dealer at the appellate stage, either under the Central Sales Tax Act, 1956, or the rules made thereunder. From 1st April, 1973, there is a statutory time limit for furnishing C form declarations. The time-limit is prescribed by rule 12(7) of the Central Sales Tax (Registration and Turnover) Rules, 1957. The source of this rule is to be found in the proviso to section 8(4) of the said Act, as amended with effect from 1st April, 1973. In terms of rule 12(7), C form shall be furnished "up to the time of assessment by the first assessing authority". However, there i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eral Sales Tax, 1959. The provisions show clearly that the power of the appellate authority concerning an assessment under appeal is no different, and not less wide, than the power of the assessing authority to make the assessment in the first instance. Besides, such power as the appellate authority is empowered to exercise in relation to an assessment under appeal, has got to be exercised only in the same manner and subject to the same conditions, if any, which govern the exercise of the power of assessment by the assessing authority in the first instance. It follows, therefore, that whatever discretion is conferred on the assessing authority for purposes of assessment, must so be regarded, as a matter of statutory construction, to have been conferred on the appellate authority even without the concerned statutory provision expressly naming the appellate authority in that behalf. It goes without saying that an appellate authority, engaged as it is in precisely the same task under the fiscal statute as that of the assessing authority must also be possessed of like powers as those of the assessing authority. It is implicit in the very nature of the appellate jurisdiction, as well as....
X X X X Extracts X X X X
X X X X Extracts X X X X
....and (ii) to determine whether the income, profits and gains can properly be deduced therefrom. Section 30 of the Act gives the assessee a right of appeal in respect of certain orders including an order of assessment made under Section 23. Section 31 deals with the hearing of an appeal and powers of the Appellate Assistant Commissioner. Before disposing of the appeal, the Appellate Assistant Commissioner may, if he thinks fit, make a further enquiry himself or cause it to be made by the Income Tax Officer, and in disposing of the appeal he may, in the case of an order of assessment, confirm, reduce, enhance or annul the assessment; he may set it aside and order a fresh assessment. There is nothing in the language of Section 31 of the Act which imposes any restriction on the powers of an Appellate Assistant Commissioner so as to prevent him from exercising the power under the proviso to Section 13. The restriction, if any, must be inferred from the language of the proviso itself. It is contended that the use of the words "in the opinion of the Income Tax Officer" in the second part of the proviso to Section 13 suggests a complete elimination of the Appellate Assistant Commissioner's ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... cases. Why should it be inviolate in one case and not so when the assessee appeals against a determination made adverse to him? We feel that the second condition is expressed in the terms in which it has been expressed, because it involves an inferential process and the expression "in the opinion of the Income Tax Officer" is aptly used as that officer must in the first instance make the determination. It does not necessarily follow that the Appellate Assistant Commissioner cannot revise the determination and exercise the power which the Income Tax Officer could exercise." Thus, the Supreme Court has held that the appellate authority can exercise the power which the Income Tax Officer could exercise. 10.2 In the light of the principles enunciated in the above decisions, the powers of the appellate authority being an extension of the powers of the assessing authority, any order that could be passed by the assessing authority can be passed by the appellate authority. Under the circumstances, no infirmity can be found in the view of the Tribunal that if the adjudicating authority has not exercised the discretion to condone the delay, the Tribunal can exercise such discretion. 11. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... provided or agreed to be provided and such invoice, bill, or as the case may be, challan shall be serially numbered and shall contain the details enumerated thereunder. 11.5 Sub-rule (2) of rule 4A of the Service Tax Rules, 1994 provides that every input service distributor distributing credit of taxable services shall, in respect of credit distributed, issue an invoice, a bill or, as the case may be, a challan signed by such person or a person authorized by him, for each of the recipient of the credit distributed, and such invoice, bill, or as the case may be, challan shall be serially numbered and shall contain the following, namely: (i) The name, address and registration number of the person providing input services and the serial number and date of invoice, bill, or as the case may be, challan issued under sub-rule (1); (ii) The name and address of the said input service distributor; (iii) The name and address of the recipient of the credit distributed; (iv) The amount of credit distributed. 11.6 Thus, under sub-rule (1) of rule 4A of the Service Tax Rules, the input service distributor receives invoices issued by the service provider towards purchases of input servi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t of April, 2016; (g) provisions of rule 6 shall apply to the units manufacturing goods or provider of output service and shall not apply to the input service distributor. Explanation 1.- For the purposes of this rule, "unit" includes the premises of a provider of output service or the premises of a manufacturer including the factory, whether registered or otherwise or the premises of an outsourced manufacturing unit. Explanation 2.-For the purposes of this rule, the total turnover shall be determined in the same manner as determined under rule 5: Provided that the turnover of an outsourced manufacturing unit shall be the turnover of goods manufactured by such outsourced manufacturing unit for the input service distributor. Explanation 3.- For the purposes of this rule, the 'relevant period' shall be,- (a) if the assessee has turnover in the 'financial year' preceding to the year during which credit is to be distributed for month or quarter, as the case maybe, the said financial year; or; (b) if the assessee does not have turn over for some or all the units in the preceding financial year, the last quarter for which details of turnover of all the units are ava....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Z unit to the registered service provider. However, in case of refund claims falling under Table-II of Form A-4, payment of service tax to the registered service provider is made by the input service distributor and not the SEZ unit. However, since the expression employed in clause (e) is, "the month in which actual payment of service tax was made", therefore, in cases falling under Table-II of Form A-4, the claim for refund would be required to be made within one year from the end of the month in which actual payment of service tax was made by the input service distributor to the service provider and not one year from the end of the month in which the ISD invoices were issued. 11.13 At the cost of repetition, it may be noted that the Tribunal, in the impugned order, has held that as the refund in respect of services covered in Table-II of Form A-4 can be preferred by the SEZ unit only after the input service distributor in the DTA distributes the tax pertaining to invoices under which services common to the SEZ and DTA units have been received, the approach, adopted by the adjudicating authority is correct. The Tribunal has further noticed that it is only after the input service ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ble the SEZ unit to file the refund claim within the time provided therein. As rightly submitted by the learned Senior Standing Counsel for the appellant, distribution of credit is an internal administrative matter of the SEZ unit and the input service distributor and they have to manage their affairs in a manner whereby, the refund claims can be made within the prescribed time limit. The Tribunal was, therefore, not justified in holding that the date of the ISD invoice has to be taken for computing the one year stipulated in the notification. While this may be a good ground for extending the period for filing the refund claim, there cannot be an absolute proposition that in all cases where the refund claim is filed within a period of one year from the end of the month in which the ISD invoice is issued, the period for filing refund claim has to be extended as the same would amount to reading into clause (e) of paragraph 3(III) of Notification No.12/2013-ST dated 01.07.2013 something that the authority which issued the notification did not intend. 11.15 The learned Senior Standing Counsel for the appellant has submitted that in some cases, the ISD invoices have been issued in resp....