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2025 (7) TMI 1003 - AT - Service TaxRefund of service tax paid - Management consultancy service was approved during the relevant months/ period or not - refund is admissible on invoices issued by the service provider for renting of furniture and fixtures or not - condonation of delay in filing refund claim. Whether Management consultancy service was approved during the relevant months/ period? - HELD THAT - Vide letter dated 16.02.2012 Minutes of 4th approval committee meeting of E-Complex Pvt. Ltd. were issued which at item No.4.1 mentioned that the list of services for Pipavav Defence Offshore Engineering Company Ltd. (now M/s. Swan Defence and Heavy Industries Limited) has already been approved by previous approval committee meeting - The letter leaves no doubt that Management consultancy service was approved in the case of the appellant and hence refund of service tax paid on this service should have been allowed. As both Banking and other Financial services as well as Business Auxiliary Service have been approved by the unit approval committee refund of service tax paid on these services is admissible to the party and should not have been rejected - the appellant has wrongly been disallowed refund of Rs. 43, 50, 828/- under Management consultancy service and hold that the same is admissible to them. Whether refund is admissible on invoices issued by the service provider for renting of furniture and fixtures? - HELD THAT - This Tribunal in RELIANCE NAVAL ENGINEERING LIMITED 2024 (8) TMI 1591 - CESTAT AHMEDABAD and 2024 (8) TMI 1590 - CESTAT AHMEDABAD has held that the beneficial nature of export benefits available to the party cannot be improperly rejected on mere technicalities. The case of the appellant is also supported by CBIC master Circular No. 96/7/2007-ST dated 23.08.2007 - It is also found that Renting of Immovable Property Service is duly approved by the Unit Approval Committee and therefore refund of service tax cannot be disallowed merely on the ground that there are two separate invoices i.e. one for rent of the building and the other for rent of the furniture and fixtures. There are no hesitation in upholding the view taken by this Tribunal and therefore refund of above amount is admissible to the appellant subject to correctness of service tax payment. Whether delay in filing refund claim is condonable? - HELD THAT - The reasons given by the appellant are genuine. It is also found that in similar cases with respect to exemption N/N. 12/2013- ST dated 01.07.2013 available to SEZ units Tribunal has taken a liberal view and condoned the delay as was available under the said exemption Notification. The condition (e) of the said Notification clearly provides for condonation of delay. It uses the word 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. This clearly means that the benefit under a beneficial legislation should not be withheld just for technicalities if otherwise claim is found genuine. The contention of the appellant is agreed and the delay in filing the refund claim is condoned and the original authority is directed to sanction refund to the extent admissible on merits. Appeal allowed.
The core legal questions considered by the Tribunal in this appeal are as follows:
(a) Whether Management Consultancy Service was approved by the Unit Approval Committee during the relevant period for the purpose of claiming refund under Notification No.12/2013-ST dated 01.07.2013Rs. (b) Whether refund of service tax paid on invoices issued by the service provider for renting of furniture and fixtures, classified under "Renting of Immovable Property Service," is admissibleRs. (c) Whether the delay in filing the refund claim beyond the prescribed one-year period is condonable under the provisions of Notification No.12/2013-ST and relevant legal principlesRs. Issue (a): Approval of Management Consultancy Service for Refund Claim Legal Framework and Precedents: The refund claim was filed under Notification No.12/2013-ST dated 01.07.2013, which requires the service to be among the list of specified services approved by the Unit Approval Committee (UAC) of the SEZ. The appellant relied on the Minutes of the 4th Approval Committee meeting dated 01.02.2012, which included Management Consultancy Service in the list of 91 approved services. The Department relied on a Public Notice dated 09.10.2013, which listed 58 default authorized services excluding Management Consultancy Service, and thus denied refund for that service during the relevant period. Court's Interpretation and Reasoning: The Tribunal examined the documentary evidence including the letter dated 16.02.2012 containing the Minutes of the 4th UAC meeting, which explicitly approved Management Consultancy Service as a specified service for the appellant's SEZ unit. The Tribunal also considered the letter dated 11.08.2015 clarifying that the list of 91 services approved in 2012 continued to be valid notwithstanding the Public Notice of 2013. The Tribunal held that the Public Notice was prospective in nature and did not revoke earlier approvals. Therefore, Management Consultancy Service was approved during the relevant period. Key Evidence and Findings: The Minutes of the 4th UAC meeting (01.02.2012), letter dated 11.08.2015, and the appellant's submissions were pivotal. The Tribunal also noted that some invoices initially claimed under Management Consultancy Service pertained to Business Auxiliary Service and Banking and Other Financial Services, which were also approved by the UAC, making those refund claims admissible. Application of Law to Facts: Since the Management Consultancy Service was approved by the competent authority for the period in question, the rejection of refund on this ground was incorrect. Treatment of Competing Arguments: The Department's reliance on the 2013 Public Notice was rejected as it was prospective and did not affect prior approvals. The appellant's documentary proof was accepted as conclusive. Conclusion: Refund of service tax paid on Management Consultancy Service and related approved services is admissible. Issue (b): Refund on Renting of Furniture and Fixtures under Renting of Immovable Property Service Legal Framework and Precedents: The appellant claimed refund of service tax paid on renting of furniture and fixtures in a rented building, classified by the service provider under "Renting of Immovable Property Service." The Department rejected this on the ground that furniture and fixtures do not constitute immovable property. The appellant cited CBIC Master Circular No.96/7/2007-ST dated 23.08.2007 and a Tribunal decision in a similar case, arguing that classification by the service provider cannot be altered at the recipient's end and that refund should be allowed. Court's Interpretation and Reasoning: The Tribunal referred to its own recent decisions in the appellant's case (Final Orders Nos. 11822/2024 and 11920/2024 dated 21.08.2024) which held that export benefits to SEZ units should not be denied on mere technicalities. It found that the service provider had paid service tax under "Renting of Immovable Property Service" and that this service was approved by the UAC. The Tribunal emphasized that separate invoicing for rent of building and furniture/fixtures does not negate the classification or entitlement to refund. Key Evidence and Findings: Invoices issued by the service provider, classification under Renting of Immovable Property Service, approval of this service by the UAC, and the CBIC Master Circular supporting the appellant's position. Application of Law to Facts: The Tribunal applied the principle that the beneficial nature of SEZ exemption/refund provisions should be liberally construed, and classification by the service provider is binding. Therefore, refund is admissible. Treatment of Competing Arguments: The Department's technical objection was rejected as inconsistent with the beneficial intent of the law and prior Tribunal rulings. Conclusion: Refund of service tax paid on renting of furniture and fixtures under the category of Renting of Immovable Property Service is admissible. Issue (c): Condonation of Delay in Filing Refund Claim Legal Framework and Precedents: Notification No.12/2013-ST dated 01.07.2013 prescribes a one-year time limit for filing refund claims but allows the Assistant or Deputy Commissioner to permit an extended period. The appellant sought condonation of delay citing reasons such as financial strain, delay in obtaining certificates from multiple banks, and efforts to avoid human error. The appellant relied on Tribunal decisions including APK Identification vs. Commissioner of Central Excise and SRF Ltd. vs. Commissioner of Customs, Central Excise & Service Tax, which took a liberal view in condoning delay in SEZ refund claims. Court's Interpretation and Reasoning: The Tribunal noted that the Assistant Commissioner had rejected the condonation request on the ground that the appellant repeated the same reasons as in an earlier claim, which was not accepted. However, the Tribunal found the reasons genuine and substantial, particularly the logistical difficulties in collecting certificates from 29 banks located at different places. The Tribunal emphasized the beneficial nature of the SEZ Act and the overriding effect of Section 51 of the SEZ Act over other laws, supporting a liberal construction of refund provisions. Key Evidence and Findings: Appellant's detailed explanation of delay, prior Tribunal decisions condoning delay under similar circumstances, and the explicit provision in Notification No.12/2013-ST allowing extension of time. Application of Law to Facts: The Tribunal applied the principle that beneficial legislation should not be defeated by technicalities and that the power to condone delay should be exercised judiciously to advance substantive justice. Treatment of Competing Arguments: The Department's concern about administrative inconvenience due to repetitive delay was acknowledged but not found sufficient to override the genuine reasons advanced by the appellant. Conclusion: Delay in filing refund claim is condonable, and the refund claim should be considered on merits. Significant Holdings: "The committee, after due deliberations, decided that the list of 91 services as approved by the 4th UAC of E-complex Pvt. Ltd. SEZ held on 01.02.2012, for existing Developer and Unit (M/s. Swan Defence and Heavy Industries Limited) would deemed to have been continued and will continue further. Accordingly, all the above referred 91 services stand approved for service tax exemption w.e.f. 01.02.2012." "The beneficial nature of export benefits available to the party cannot be improperly rejected on mere technicalities." "The condition (e) of the said Notification, clearly provides for condonation of delay. It uses the word '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.' This clearly means that the benefit under a beneficial legislation should not be withheld just for technicalities, if otherwise, claim is found genuine." Core principles established include:
Final determinations on each issue are:
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