TaxTMI 
TaxTMI 
2021 (12) TMI 848
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.... Being aggrieved by the Order-In-Original, the department has preferred appeal before the learned Commissioner (Appeals), who upheld the Order-In-Original and rejected the appeal filed by the department. Therefore, the present appeal filed by the revenue for the part amount out of the refund allowed by the learned Commissioner (Appeals), the revenue's grounds of appeals made in the appeal memo are summarized below:- (a) That requirement of Para 3 (III)(f) is not satisfied as the respondent had filed more than one refund claim for each quarter. (b) The reasons assigned for condoning delay beyond one year as required by Para 3(III)(e) are not cogent and valid. (c) The Deputy Commissioner had not verified the correctness of the distribution of Cenvat Credit made by the ISD in favour of the SEZ Unit through ISD Invoices, the refund claim was sanctioned without verification of documents and only accepting the declaration made by the respondent in as much as since Table-II contains no coloumn for specifying the date of actual payment to the registered service provider, no such date was actually furnished by the respondent in the table and the summary sheet. ....
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.... is a general condition meant for all situations. He submits that the respondents contention that the provision of notification have to be construed keeping in view the benevolent and beneficial object and purport of the statute that clause(e) of Para 3(III) has no application to the eventualities covered by Table-II of Form A-4 which are absolutely preposterous and holds no merit. 2.2 He further submits that in the following judgments, it has been held that non-fulfilment of conditions of notification would not entitle the party to its exemption/benefits. • LAXMI SOLVEX vs. CCE, INDORE- 2017 (3) G.S.T.L. 435 (Tri.-Del.) • CCE, INDORE vs. K.S. OILS LTD.- 2017 (52) S.T.R. 261 (Tri.-Del.) • PRINCIPAL COMMISSIONER OF S.T. Vs. R.R. GLOBAL ENTERPRISES PVT. LTD.- 2016 (45) S.T.R. 5 (A.P.) As regard the respondent's contention that the revenue's attempt to place time limit in clause(e) with respect to refund arising out of the ISD Invoice has the effect of indirectly imposing a time limit in Para 7 of Cenvat Credit Rules, 2004 when no such time limit exists in the said rule. The said argument is baseless as the notification specifically provide....
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....payment to the service provider and the refund application. There is a gross violation of conditions of the notification. 2.5 As regard the issue that the respondent had filed more than one refund claim per quarter, the same is not permissible under clause (f) of Para 3(III). The respondent's contention that they have filed one refund claim for each quarter including the quarter of dispute namely, June-2017 to September-2017 and that no more than four refund claims have been filed for any given year and they have also submitted a chart indicating the dates relevant quarters for which the claims have been filed. He submits that the contentions of the respondent are totally incorrect under the pretext the refund claim for one quarter i.e. of the quarter July- 2017 to September- 2017. Respondent also filed claim for the invoice pertaining to the period from August 2013 to October-2017 therefore, it is clear that the appellant have filed more than one refund claim for one quarter accordingly, violated the conditions of Para3 (III)(f) of notification. He submits that the judgements cited by the appellant on this issue are not squarely applicable in this case. 2.6 He submits that t....
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....the service provider which were common to authorized operations in SEZ Unit in the operations and the DTA Units. There are no findings also about the authenticity of older invoices taken up in the present claim whether those invoices had already been covered in the previous quarterly claims and this is not repeat of the same. In view of this, it is evident that despite the report from the jurisdictional Range Superintendent which indicates inability to conduct the verification of all the relevant documents, the adjudicating authority has sanctioned the refund claim. The details of distribution of ISD Jamnagar to SEZ have not been verified. 2.8 In view of his above submission, the appellant prays that their appeal be allowed and matter be remanded for proper verification. 03. Shri Vishal Agrawal along with Shri Akhil Sheraji, Shri Vipin Jain & Ms. Dimple Gohil, Advocates appearing on behalf of the respondent submits that Para 3 (III)(e) of Notification No.12/2013-ST is not applicable to their refund corresponding to Table-II of Form- A4. The notification covers two distinct kinds of situations and requires details to be furnished separately in respect of each of these two situ....
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....vision covers only instances covered by Table-I wherein, SEZ deals directly with the Registered Service Provider and makes payment to it. In Table-II situations payment to the service provider is made not by the SEZ Unit but by the Head Office in DTA therefore, in respect of payment for services made by Head Office Para 3(III)(e) is incapable of application as the time limit prescribed therein begins from the date of payment of service providers by the SEZ Unit. He submits that the submission of the respondent that clause (e) is not applicable to Table-II cases does not render clause (e) redundant or otiose but instead confines its application to Table-I cases. 3.4 He further submits that the refund covered by Table-II relates to input services which are common to authorised operations of SEZ Unit as well as DTA Operation and the tax paid on such common input service which are distributed in the manner provided for in Rule 7 of the Cenvat Credit Rules, 2004. In such scenario, there is no contract between the SEZ Unit and the Registered Service Provider therefore, never any actual payment made by the SEZ Unit in favour of the Registered Service Provider. In such cases, the invoic....
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....e view that the above contention was convincing. It is for this reason Hon'ble High Court of Gujarat did not decide on this issue of law but made it clear that Para 13 of its order dated 12.12.19 that this issue was being kept open and could be decided in any other proceedings before appropriate forum uninfluenced by any observation made by the High Court in its order dated 12.12.19. He placed reliance on the Hon'ble Supreme Court judgement in the case of CIT Vs. B.C. SRINIVASA SETTY-(MANU/SC/285/1981) & COMMISSIONER OF C.EX. & CUS., KERALA Vs. LARSEN & TOUBRO LTD.-2015 (39) S.T.R. 913 (S.C.). 3.7 He further submits that assuming that Para 3 (III)(e) is applicable in respect of Table-II cases, the period of time prescribed therein is extendable without any fetters and without the need to assign reasons thus, making it clear that the said provision is to be construed liberally and not directly, particularly in view of the beneficial and benevolent nature of the notification and the SEZ Law. He placed reliance on the following judgment. • COLLECTOR, LAND ACQUISITION, ANANTNAG Vs. MST. KATIJI -1987 (28) ELT 185 (SC) • P.B. DEVASWOM Vs BHARGAVI AMMA (MANU/S....
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....d within which the refund claim could be filed. As regard claim refers to Table-II there are more than 33,400 ISD Invoices which were supported by backup documents such as Mother Invoice, ISD Invoice and Invoice Verification documents and the bank payment vouchers altogether the documents are approximately more than 1.5 Lakhs. In covering letter dated 31.10.17 itself shows that these documents were submitted in 1255 Volumes. In this fact the reason given by the Deputy Commissioner regarding voluminous documents involved is not bold or exaggerated assumption but one which is duly backed and supported by facts. The so-called delay was attributed entirely due to the distribution of the common credit at the ISD Level. In so far as the SEZ Unit is concerned, the claim was filed within one year from the receipt of ISD Invoices. Prior to the receipt of ISD Invoice, the respondent SEZ Unit had no means to claim refund as the amount of refund attributable to the SEZ becomes known to the SEZ Unit only on receipt of the ISD Invoice. It is clear from columns 9, 10 & 11 of Table-II itself that the refund claim in respect of common input services has to be backed and supported by ISD Invoice, wi....
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....rrectness of the distribution made by ISD. Therefore, the correctness of ISD Invoice cannot be doubted accordingly, there is no error in the documents on the basis of which the refund was claimed. He submits that in this regard the respondent relies upon the order of this Hon'ble Bench in the respondent's own case for the previous period wherein, the similar grounds raised by the revenue reported at COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX Vs. RELIANCE INDUSTRIES LTD.-2019 (26) G.S.T.L. 34 (Tri.-Ahmd), doubting the correctness of the distribution of the Cenvat Credit sighting any specific instance or error in any particular invoice was rejected. 3.14 He submits that the finding of the Hon'ble Tribunal was accepted by the revenue and there was no challenge of the said the finding before the Hon'ble Gujarat High Court in Tax Appeal No.740 & 743 of 2019. 3.15 He further submits that the reviewing authority ought not to have ordered for filing appeal as there was no right to levy and collect tax from SEZ Unit and at any rate, refund of Table-II services would have otherwise been admissible under Rule 5 of Cenvat Credit Rules, 2004. He placed reliance on the following judgme....
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.... as well as written submissions made by the appellant as well as by the respondent. The issue to be decided in this case is that whether the sanction of respondent's refund claim in terms of Notification No.12/2013-ST dated 01.07.2013 by the lower authorities is correct and legal and in compliance with the conditions prescribed therein. 4.1 As regard the issue that the respondent is required to file only one refund claim for each quarter in terms of Clause (f) of Para 3 (III) of the notification, firstly, the respondent have admittedly filed only one refund claim for each quarter therefore, it cannot be said that the respondent have filed more than one claim in each quarter. Secondly in the facts that the respondent have filed refund claim in quarter July 2017 to September 2017 which includes the claim of the invoices which are for the period from August 2013 to October 2017 even if, it is assumed that the refund claim for the part of the invoices which were pertaining to earlier quarter filed in the quarter July 2017 to September 2017 only on this ground, refund cannot be denied. As this issue has time and again considered in the judgments cited by the respondent. In the case o....
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....an once in any quarter in a calendar year. From the perusal of the provisions, we find that the intent of the legislature was that the assessee should not file refund claim on day to day basis or weekly or invoice-wise. To avoid multiplicity of the refund claim this provision was made, therefore, it is suggested that refund claim can be filed on quarterly basis in a calendar year i.e. not more than four times in a calendar year. It does not mean that the assessee has to file refund claim quarterly. It is not the intent of the legislature. In our opinion, if the assessee files a refund claim once in a year that will also avoid the multiplicity. Therefore we do not find any merit in the denial of the rebate claim on this ground. In the case of CCE Vs. CHAMUNDI TEXTILES (SILK MILLS) LTD.(supra), the same issue has been decided as under: 7. I have carefully considered the case records and the submissions made by both sides. The ground raised to assail the impugned order is that it had allowed refund of accumulated input service credit which did not pertain to the goods exported during the periods for which the claims were made. I find that this aspect has been clarified by ....
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....id. We find that the learned Deputy Commissioner has extended the time period by exercising his discretion and considering the reasons therefore, the same cannot be interfered. Moreover, we find that there is a humungous set of documents which runs into 1255 Volumes including 33,400 ISD Invoices, it is obvious that to compile such a voluminous documents it is a time consuming exercise therefore, the delay in filing the refund in respect of ISD Invoices is cogent and reasonable. Therefore, the claim of the respondent that the documentation involved was voluminous is not a bold or exaggerated assertion. We further find that the delay is attributed entirely to the delay in distribution of the common credit at the ISD Level. However, the claim was filed within one year from the receipt of ISD Invoice therefore, firstly there is no delay from the date of ISD Invoice but even if it is considered that there is a delay the same is supported by proper reason. Further the respondent could not have filed refund claim without having ISD Invoices therefore, it was beyond their control to file refund claim before issuance of ISD Invoice. Even the department would not entertain any refund claim w....
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....ch as clause (e) does not stipulate that the exercise of power to condone the delay in filing the claim for refund, shall be for reasons to be recorded in writing as is the case with the several other statutory provisions in Chapter V of the Finance Act, 1994. To quote as an example, Section 85(3A) of the Finance Act, 1994 which deals with filing of an appeal before the Commissioner (Appeals) provides that the Commissioner (Appeals) shall, if it is satisfied that the appellant was prevented by sufficient cause from presenting the appeal, allow it to be presented within a further period. Such a satisfaction on the part of the Commissioner (Appeals) obviously would have to expressly form a part of the reasoning in his order. However, insofar as clause (e) of Para 3(III) is concerned there is no such stipulation. In the facts of the present case, we are of the view that, the adjudicating authority has judicially exercised the discretion vested in it. The exercise of such discretion could have been questioned only if it is shown to be mala fide or vitiated with perversity. It is nobody's case that the exercise of discretion by the adjudicating authority is mala fide or perverse, co....
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....e manner specified in Rule 7 of Cenvat Credit Rules, 2004. For this purpose, the refund application requires the reason to furnish the details of turnover of the SEZ Unit in the previous Financial year as also the turnover of the DTA Operations in the previous Financial year. It is not under dispute that the respondent had furnished along with its claim complete break up of turnover details duly certified by Chartered Accountant in accordance with the requirements of Rule 7 of Cenvat Credit Rules, 2004. As provided in Para 3 (III)(a) read with Table-II of Form A-4 of the notification, revenue has nowhere disputed that the turnovers declared in the refund application while in any manner incorrect or inaccurate. It is also not the case that in any particular instance, the distribution of Cenvat Credit is incorrect. It is also observed that it is on record that after receipt of refund application, the Range Superintendent was called upon to submit his verification report which was submitted by him on 30.11.2017 as recorded in Order-In-Original thus, the contention of the revenue that no verification was carried out by adjudicating authority is absolutely incorrect and not supported by....
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....tributed on the basis of the turnover of the SEZ unit and that of the DTA unit as envisaged in clause (a) of Para 3(III). We are unable to accept the objection of the Revenue nor has the Revenue shown as to what is incorrect with the claim of refund filed by the respondent assessee. In our view the adjudicating authority has acted completely in accordance with law while processing the claim for refund in the manner prescribed in the refund notification. We do not agree with the objections of the Revenue that the adjudicating authority has not applied his mind to compliance of provision of clause (a) of Para 3(III), on the contrary we find that the Revenue has not been able to justify their submissions by pointing out any infirmity in the order of the adjudicating authority." 4.6 We find that as per the submission made by the respondent, the above finding of the Tribunal attained finality as though the revenue challenged the above order before the Hon'ble High Court under Tax Appeal No.740 & 743 of 2019 but the above finding was not challenged in the said Tax Appeal. In view of the above position of law, in the respondent's own case, the refund cannot be questioned on the ground ....
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....veloper shall get an approval by the Approval Committee of the list of the services as are required for the authorised operations (referred to as the "specified services‟ elsewhere in the notification) on which the SEZ Unit or Developer wish to claim exemption from service tax. (II) The ab-initio exemption on the specified services received by the SEZ Unit or the Developer and used exclusively for the authorised operation shall be allowed subject to the following procedure and conditions, namely:- (a) the SEZ Unit or the Developer shall furnish a declaration in Form A-1, verified by the Specified Officer of the SEZ, along with the list of specified services in terms of condition (I); (b) on the basis of declaration made in Form A-1, an authorisation shall be issued by the jurisdictional Deputy Commissioner of Central Excise or Assistant Commissioner of Central Excise, as the case may be to the SEZ Unit or the Developer, in Form A-2; (c) the SEZ Unit or the Developer shall provide a copy of said authorisation to the provider of specified services. On the basis of the said authorisation, the service provider shall provide the specified servic....
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....thereon shall have been paid to the person liable to pay the service tax thereon, or as the case may be, the amount of service tax payable under reverse charge shall have been paid under the provisions of the said Act; (e) the claim for refund shall be filed within one year from the end of the month in which actual payment of service tax was made by such Developer or SEZ Unit to the registered service provider or such extended period as the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, shall permit; (f) the SEZ Unit or the Developer shall submit only one claim of refund under this notification for every quarter: Explanation.- For the purposes of this notification "quarter" means a period of three consecutive months with the first quarter beginning from 1st April of every year, second quarter from 1st July, third quarter from 1st October and fourth quarter from 1st January of every year. (g) the SEZ Unit or the Developer who is not so registered under the provisions referred to in clause (c), shall, before filing a claim for refund under this notification, make an application for registr....
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....viii) Information regarding Bank Account (Bank, address of branch, account number) in which refund amount should be credited/to be deposited : (ix) Details regarding service tax refund claimed : claim refund of Rs. .................... (Rupees in words) as per the details furnished in the Table I and Table II below for the period from__________ to__________. (A) Refund of service tax in respect of service tax paid on specified services exclusively used for the authorised operations in SEZ, as approved by the Approval Committee of the___________ SEZ [Rupees____________] as per the details below TABLE-I S. No. Description of taxable service Name and address of service provider STC No. of service provider (Indicate "self" if reverse charge applies to the specified service) Invoice* No. Date Value of service Service tax + cesses paid (1) (2) (3) (4) (5) (6) (7) (8) Total amount claimed as refund *Certified copies of documents are enclosed. (B) Refund on respect of service tax paid on specified servic....
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....ed by managing director of the SEZ Unit/Developer) with complete address, telephone and e-mail. Date : Place : 4.8 On careful perusal of the above notification, we find that though in Para 3 (III)(e) there is a condition that the refund claim should be filed within one year from the actual date of payment of service tax to the registered service provider however, the discretion to extend the said time limit is vested with the Assistant Commissioner/Deputy Commissioner of Central Excise. Firstly, as we observed above, the Deputy Commissioner has rightly extended the time limit on the cogent reason. Secondly the condition (e) of Para 3 (III) of Notification is applicable only in respect of the refund claimed under Table-I of Form A-4. From the Table-II, coloumn 9, 10 & 11 it clearly provides that only amount distributed to the SEZ Unit/Developer needs to be claimed as refund and detail of documents such as ISD Number and date has to be mentioned. As per the said format, the refund claim under table-II can only be filed when the SEZ Unit receives the ISD Invoices. In the present case there is no dispute that the respondent has filed the refund claim within one yea....
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....month in which actual payment of service tax was made by such developer or SEZ Unit to the registered service provider. From this condition, it is mandatory that the payment of service tax has to be made by the SEZ Unit. In the present case, only the services covered under the Invoices which are exclusively used by the SEZ Unit and refund of which claimed under Table-I payment of service tax is directly made by the SEZ to the service provider. However, in case all the services which are attributed to the SEZ Unit as well as DTA Unit of the respondent company the payment was made by the Head Office of the respondent SEZ Unit and the credit related to service attributed to the SEZ unit was distributed through ISD Invoice to the respondent's SEZ Unit. In this case payment was not made by the respondent's SEZ Unit therefore, the condition of clause (e) of Para (III) of the notification shall not apply for the reason that the said clause is applicable only in a case where the payment of service tax is directly made by the SEZ to the service provider when the services are exclusively used in the SEZ unit. Legislators intention is very clear that one year period is applicable only in case....
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....instead of this exemption notification in accordance with Cenvat Credit Rules, 2004 therefore, the respondent is entitle for the refund under Rule 5 of Cenvat Credit Rules, 2004. In view of this, under any circumstances the SEZ Unit should not be burdened with any duties of Excise, Service Tax therefore, for a minor procedural lapse if the SEZ Unit is burdened with duties/taxes, the whole objective of SEZ Scheme will stand defeated. 4.13 As regard the heavy reliance made by the learned counsel appearing on behalf of the appellant in judgments of Hon'ble Supreme Court in the case of DILIP KUMAR (supra) it is otherwise settled position that if any procedural condition is violated, the substantive benefit of the notification cannot be denied therefore, the Hon'ble Supreme Court judgment in the case of DILIP KUMAR cannot be applied invariably in cases where the violation of condition which is procedural. The ratio of the judgment can be applied considering the facts of each case and also the nature of condition which is violated. Therefore, in the facts of the present case ratio of Hon'ble Apex Court in the case of DILIP KUMAR cannot be applied. Even if it is assumed that clause (e)....
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....ay. 5. There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact he runs a serious risk. 6. It must be grasped that judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so. Making a justice-oriented approach from this perspective, there was sufficient cause for condoning the delay in the institution of the appeal. The fact that it was the 'State' which was seeking condonation and not a private party was altogether irrelevant. The doctrine of equality before law demands that all litigants, including the State as a litigant, are accorded the same treatment and the law is administered in an even handed manner. There is no warrant for according a step-motherly treatment when the 'State' is the applicant praying for condonation of delay. In fact experience shows that on account of an impersonal machinery (no one in charge of the matter is directly hit or hurt by the judgment sought to be subjected ....
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....nt and decide the matter on merits, rather than terminate the appeal on the ground of abatement. (iii) The decisive factor in condonation of delay, is not the length of delay, but sufficiency of a satisfactory explanation. (iv) The extent or degree of leniency to be shown by a court depends on the nature of application and facts and circumstances of the case. For example, courts view delays in making applications in a pending appeal more leniently than delays in the institution of an appeal. The courts view applications relating to lawyer's lapses more leniently than applications relating to litigant's lapses. The classic example is the difference in approach of courts to applications for condonation of delay in filing an appeal and applications for condonation of delay in refiling the appeal after rectification of defects. (v) Want of 'diligence' or 'inaction' can be attributed to an Appellant only when something required to be done by him, is not done. When nothing is required to be done, courts do not expect the Appellant to be diligent. Where an appeal is admitted by the High Court and is not expected to listed for final hearin....
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....oubted, as the said judgment ruled that an ambiguity in a tax exemption provision must be interpreted so as to favour the Assessee claiming the benefit of such exemption. This Court after dealing with a number of judgments relating to exemption provisions in tax statutes, ultimately concluded as follows: 66. To sum up, we answer the reference holding as under: 66.1. Exemption notification should be interpreted strictly; the burden of proving applicability would be on the Assessee to show that his case comes within the parameters of the exemption Clause or exemption notification. 66.2. When there is ambiguity in exemption notification which is subject to strict interpretation, the benefit of such ambiguity cannot be claimed by the subject/Assessee and it must be interpreted in favour of the Revenue. 66.3. The ratio in Sun Export case [Sun Export Corpn. v. Collector of Customs, MANU/SC/0703/1997 (1997) 6 SCC 564] is not correct and all the decisions which took similar view as in Sun Export case stand overruled. 23. It may be noticed that the 5-Judge Bench judgment did not refer to the line of authority which made a distinction between exem....