2019 ACR 773 CESTAT Hyderabad
M/s WS Industries (India) Ltd
Vs
The Commissioner of Customs & Central Tax
REGIONAL BENCH - COURT – I
HON'BLE Mr. P. Venkata Subba Rao, Member (Technical)
Service Tax Appeal No. 31225 of 2018 Final Order 31106/2019 dated 03.12.2019
(Arising out of order-in-Appeal No. VIZ-EXCUS-002-APP-079-18-19 dated
29.06.2018. passed by Commissioner of Central excise Customs & Service Tax (Appeals) Visakhapatnam)

Note –

The decisions relied upon by the learned A.R. pertain to claim of refund under Section 11B of the Central Excise Act and Section 27 of the Customs Act read with Notification No 102/2007 (SAD refund) which do not provide for any condonation of delay. In respect of such refund claims, the statutory time limit has to be adhered to and once the refund claim is hit by limitation, no refund claim could be sanctioned.

Lenient view taken in case of appellant being SEZ in view of the difficulties which they were going through during the relevant period including a reference of their company to BIFR. Delay in filing refund claim condoned.

Present:

Mr D.V. Subha Rao, Consultant  for the Assessee.

Mr A.V.L.N.Chary A.R. for the Respondent.

ORDER

[ORDER PER:P.VENKATA SUBBA RAO]

This appeal is filed against order-in-appeal No. VIZ-EXCUS-002-APP- 079-18-19 dated 29.06.2018. The appellant is an SEZ developer registered with the service tax department. They have received certain services during the course of their operations and had filed refund claim for the service tax paid on these services under Notification No. 17/2011-ST dated 1st March 2011. After examining the refund claim, the adjudicating authority has  found that of the amount of Rs 10,26,812/- claimed by the appellant on merits they are eligible for a refund of only Rs 2,26,530/-.  Further, he  found that the refund claim has been filed beyond the period of one year stipulated in the Notification No 17/2011. Para 3 of this Notification reads as follows:-

“claim for refund should be filed within one year from the end of the manufacturing in which actual payment of service tax was made by such developer or 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, shall permit”

 

  1. The learned adjudicating authority has found that the appellant had not produced sufficient grounds for him to exercise his discretion and condone the delay of almost 3 years in filing the refund claim. Accordingly, he rejected the refund claim in toto including what he held to be admissible on merits. Aggrieved, the appellant appealed to the first appellate authority, who, by the impugned order, upheld the order of the lower authority. Hence this appeal.
  2. Learned counsel for the appellant submit that they are not disputing the amounts which were held to be ineligible for refund on merits but are disputing the rejection of refund claim on the ground of limitation of time when the Assistant commissioner/Deputy Commissioner had the discretion to condone such delay. He would submit that during the period they had several setbacks in their factory and were also referred to BIFR at one point of time. As a result of this, they were not able to pursue all service tax matters actively and claim refund in He would show the details of the bills on which they have claimed refund and would submit that the delay in filing the refund claim as detailed in pages 53 to 60 of the paper book was between 5 months and 26 months. He would urge that although the Assistant Commissioner/Deputy Commissioner had the discretion to condone the delay he has not done so and such denial of condonation has been upheld by the first appellate authority. He prays that the delay may be condoned and they may be allowed refund of the amounts which were found to be available to them on merits. He relies on the decision in the case of HPL Power Systems Ltd decided by this Bench by Final Order No A/31220- 31221/2018 dated 28.09.2018 in which, overruling the decision of the lower authority, the delay in filing refund claims by the SEZ unit was condoned by this Bench. He also relies on the decision in the case of Divis Laboratories [2014(36)STR (Tri-Bang)] in which similar decision was taken. He prays  that the delay may be condoned and they may be allowed refund.
  1. Learned A.R. supports the impugned order as well as the order of the lower authority. He asserts that the refund claim must be filed within the time limit prescribed in the exemption notification. If there is any delay, there must be sufficient grounds for doing so and the appellant had not produced sufficient grounds and therefore their request for condonation of delay was correctly rejected by both the lower authorities. He relies on the following case laws:

1) LNG Security Services Pvt Ltd Vs CST Delhi [2017(5)GSTL 291(Tri- Del)]

2) M.S. Metals Vs CC (Prev) Patna [2017(345)ELT 113(Tri-Kolkata)

3) PNC Constructions Co. Ltd Vs CCE Lucknow [2009(247)ELT 345(Tri- Del)

 

He would submit that as per the ratio laid down in the aforesaid three decisions any refund claim filed beyond the period of limitation must be rejected.

  1. I have considered the arguments of both sides and perused the records. The short point to be decided is whether the Assistant Commissioner/Deputy Commissioner was correct in rejecting the request of the appellant for condonation of delay in filing the refund claim under Notification No. 17/2011-ST dated 01.03.2011 when the notification has provided for such condonation.
  2. The case of the department is that the appellant had not adduced sufficient grounds for allowing the refund claim. Learned A.R. also relied on the aforesaid decisions to assert that the refund claim beyond the period of limitation cannot be sanctioned. Learned counsel for the appellant on the other hand prays for a lenient view in view of the difficulties which they were going through during the relevant period including a reference of their company to BIFR. They were not able to keep track of all relevant matters and therefore there was a delay in filing the refund claim which should have been condoned.
  3. I have considered the decisions relied upon by both sides. I find that in similar cases with respect to Exemption Notification No 7/2011 available to SEZ developers, this Bench had taken a liberal view and condoned the delay as was available under the Exemption Notification. The decisions relied upon by the learned A.R. pertain to claim of refund under Section 11B of the Central Excise Act and Section 27 of the Customs Act read with Notification No 102/2007 (SAD refund) which do not provide for any condonation of delay. In respect of such refund claims, the statutory time limit has to be adhered to and once the refund claim is hit by limitation, no refund claim could be sanctioned.
  1. In this factual matrix, considering the situation of the appellant during the relevant period as explained by the learned counsel, I condone the delay in filing the refund claim and direct the original authority to sanction refund claim to the extent admissible on merits. The appeal is allowed as above.

(Order pronounced and dictated in open court)