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ST – Once the eligibility criteria or any condition pre-requisite for said benefit has not been met, benefit of exemption Notification cannot be made available to assessee: CESTAT

2019-TIOL-2191-CESTAT-DEL

IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
WEST BLOCK NO 2, R K PURAM, NEW DELHI-110066
BENCH-SM
COURT NO. IV

Service Tax Appeal No. ST/51361/2016 [SM]

Arising out of Order-in-Appeal No. BHO-EXCUS-001-APP-188-15-16, Dated: 11.02.2016
Passed by the Commissioner of Service Tax, Indore

Service Tax Appeal No. ST/51362/2016 [SM]

Arising out of Order-in-Appeal No. BHO-EXCUS-001-APP-187-15-16, Dated: 11.02.2016
Passed by the Commissioner of Service Tax, Indore

Service Tax Appeal No. ST/51363/2016 [SM]

Arising out of Order-in-Appeal No. BHO-EXCUS-001-APP-189-15-16, Dated: 11.02.2016
Passed by the Commissioner of Service Tax, Indore

Service Tax Appeal No. ST/51364/2016 [SM]

Arising out of Order-in-Appeal No. BHO-EXCUS-001-APP-190-15-16, Dated: 11.02.2016
Passed by the Commissioner of Service Tax, Indore

Service Tax Appeal No. ST/51355/2016 [SM]

Arising out of Order-in-Appeal No. BHO-EXCUS-001-APP-186-15-16, Dated: 11.02.2016
Passed by the Commissioner of Service Tax, Indore

Date of Hearing: 21.01.2019
Date of Decision: 15.03.2019

INNOVATIVE CLAD SOLUTIONS PVT LTD

Vs

COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX 
INDORE

Appellant Rep by: Mr Suresh Malik & Mr Yogender Singh, CAs
Respondent Rep by:
 Mr K Poddar, DR

CORAM: Rachna Gupta, Member (J)

ST – Notification No. 17/2011-ST as amended by Notification No. 40/2012 – ST – Refunds were rejected by the lower authorities for being filed beyond the time limit of one year from the end of month in which actual payment of service tax was made by the SEZ unit to the registered service provider – appeal to CESTAT.

Held: Admittedly there was no former Application seeking condonation of the said delay except the oral submission of appellant before adjudicating authority below about shortage of staff – said plea of the appellant has duly been dealt with in the Order under challenge holding the said explanation is not satisfactory as the appellant was otherwise running business and all other operations pertaining to their business – Law has been settled that the exemption Notification has to be construed strictly and there has to be strict interpretation of the same by reading the same literally – Once the said eligible criteria has not been met with or any condition pre-requisite for the said benefit has not been met the benefit of exemption Notification cannot be made available to the assessee – no infirmity in the orders being challenged – Appeals dismissed: CESTAT [para 6]

Appeals dismissed

Case laws cited:

N. Balakrishnan Vs. M. Krishnamurthy – 2002-TIOL-737-SC-LMT…Para 3

Uttam Industries Vs. Commissioner of Central Excise – 2011-TIOL-23-SC-CX…Para 6

Kartar Rolling Mills Vs. Commissioner of Central Excise – 2006-TIOL-46-SC-CX…Para 6

FINAL ORDER NOS. 50374-50378/2019

Per: Rachna Gupta:

Present Order disposes of 5 Appeals, the details whereof are as follows:

Appeal No.SCN DatedPeriod of demandRefund Claimed
ST/51361/201619.01.201501.04.2010 to 31.03.20112,36,264/-
ST/51362/201619.01.201501.04.2010 to 31.03.20113,30,516/-
ST/51363/201619.01.201501.04.2010 to 31.03.201142,721/-
ST/51364/201616.01.201501.10.2013 to 31.12.201327,458/
ST/51355/201619.01.201501.04.2012 to 30.09.20123,12,340/-

Relevant facts are as follows that the appellant filed refund of service tax for the respective amount and the respective period in terms of Notification No. 17/2011-ST as amended by Notification No. 40/2012 – ST. The said refunds were rejected by both the adjudicating authorities for being filed beyond the time limit of one year from the end of month in which actual payment of service tax was made by the SEZ unit to the registered service provider without any reason for condonation of delay in filing the claim. Being aggrieved, the appellant is before this Tribunal.

2. I have heard Mr. Suresh Malik and Mr. Yogender Singh, Ld. CAs on behalf of the appellant and Mr. K. Poddar, Ld. DR on behalf of the Department.

3. It is submitted that Notification 40 of 2012 is extending a substantive benefit in favour of the appellant. The same cannot be disallowed merely on the procedural lapse. Decision of Hon’ble Supreme Court in the case of N. Balakrishnan Vs. M. Krishnamurthy reported in 2008 (228) E.L.T. 162 (S.C.) = 2002-TIOL-737-SC-LMTwas relied upon to emphasise that though everyday delay has some lapse on part of the litigant concerned however that alone is not enough to turn down his plea and to shut the door against him. If the explanation does not smack of malafides or it is put forward as part of a dilatory strategy, the Court must show utmost consideration to the litigant except when there is a reasonable ground to hold that delay was occasioned by the litigant deliberately to gain time then the court should lean against the expense of the explanation. The Order of Commissioner(Appeals) are therefore prayed to be set aside and appeals are prayed to be allowed.

4. Per contra, Ld. DR has impressed upon that the refund claim under Section Notification 40/2012 has to be filed within 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 as one of the condition to claim a refund. The condition was very much part and parcel of the Notification and it is only subject to fulfilment of said condition that benefit of refund could have been allowed to the assessee. While justifying the Order it is submitted that the relevant case law has duly been discussed by the adjudicating authorities. Appeal is accordingly prayed to be dismissed.

5. After hearing both the parties, I observe and hold as follows that Notification No. 40/2012 – ST dated 29.06.2012 exempts the services on which service tax is eligible under Section 66b of the said Act received by a unit allocated in Special Economic Zone (SEZ) or developer of SEZ and used for authorised operation from the whole of the service tax education cess and secondary and higher education cess leviable thereupon. The said exemption is amended to have been provided by way of refund of service tax paid specified services received by the SEZ unit or the developer of SEZ and use for the authorised operations however subject to the conditions as mentioned therein including that the claim especially be filed within one year from the end of the month in which actual payment of service tax was made by such SEZ unit or developer of SEZ 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.

6. It is apparent from the Order under challenge that admittedly the refund claim was filed beyond the time limit as prescribed above. Admittedly there was no former Application seeking condonation of the said delay except the oral submission of appellant before adjudicating authority below about shortage of staff. I observe that the said plea of the appellant has duly been dealt with in the Order under challenge holding the said explanation is not satisfactory as the appellant was otherwise running business and all other operations pertaining to t heir business. The law has been settled that the exemption Notification has to be construed strictly and there has to be strict interpretation of the same by reading the same literally as it was held by Hon’ble Apex Court in the case of Uttam Industries Vs. Commissioner of Central Excise, Haryana reported in 2011 (265) E.L.T. 14 (S.C.) = 2011-TIOL-23-SC-CX. It was clarified by the Hon’ble Apex Court while relying its previous decision in the case of Kartar Rolling Mills Vs. Commissioner of Central Excise reported in 2006 (4) SCC 772 = 2006-TIOL-46-SC-CX that the conditions of the Notification are the eligibility criteria to claim the benefit out of the said Notification. Once the said eligible criteria has not been made with or any condition pre-requisite for the said benefit has not been made that the benefit of exemption Notification cannot be made available to the assessee. In view of the said settled principle of law, I am of the opinion that there is no infirmity in the Orders under challenge. Same are accordingly upheld. Resultantly, these Appeals stand dismissed.

(Pronounced in the open Court on 15.03.2019)

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