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TMI Blog2021 (12) TMI 848X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. (d) The Deputy Commissioner had no means of verifying the correc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vision 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 provides for refund of Service Tax wherein, refund claim has been filed within one year from the end of month in which actual payment of service tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the reasons for extending the time period beyond one year under clause (e) of Para3 (III) by the Deputy Commissioner are not cogent and valid. The lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thenticity 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 situations. The said situations are as follows:- (a) Where services are received by the SEZ Unit directly from Registered Service Provider in terms of contrac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 invoice would stand issued in the name of the ISD only and payment to the service provider would also be made to the Registered Service Provider by the ISD (which is in the DTA). Conse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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/SC/7894/2008). 3.8 He submits that since there is no mandatory time limit prescribed for extending the delay, the delay should be considered liberally and the substantial benefits of refund cannot be denied. He further s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers 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, without having the ISD Invoice, the SEZ Unit cannot file a refund claim. In view of the reason assigned by the Deputy Commissioner, condoning the delay are reasonable and correct. 3.12 He further submits that even if the reason assigned by the Deputy Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 judgment BARCLAYS GLOBAL SERVICE PVT. LTD. Vs. CCT-2018 (362) ELT 889(T). 3.16 As regard the contention in the revenue's appeal that the documents submitted along with claim do not contain particulars of the date of payment so as to enable the adjudicating authority to verify comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce 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 of SRF LIMITED, this tribunal passed the following order: 4. Notification No. 12/2013, dated 1-7-2013 provides exemption to taxable services provided in SEZ unit or the developer of SEZ unit for authorized operation. The refund procedure under the said notification is contained in Paragraph III(e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efund 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 C.B.E.C. in para 3.3 of Circular No. 120/01/2010-S.T., dated 19-1-2010, which is reproduced below. "3.3 Quarterly refund claims [para 2(d) above]: As regards the quarterly filing of refund claims and its applicability, since no bar is provided in the notification, there should not be any objection in allowing refund of cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts 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 without the issuance of ISD Invoice in respect of claim under Table-II of Form A-4. It is clear from coloumn 9, 10 & 11 of Table-II that the claim for refund in respect of common input services has to be based and supported by the ISD Invoice, without having ISD invoice, the SEZ Unit cannot file claim for refund. The notification does not contemplate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore 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, consequently the challenge to such exercise of such discretion is clearly unsustainable. 9. In our view, even if one was to presume for the sake of argument that the adjudicating authority had processed the refund claim without verifying the compliance with the condition regarding time limitation prescribed in clause (e) of Para 3(III), even then there is no wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... over 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 any material or instance of an error in the distribution. It is also found that in case of any incorrect distribution of credit by ISD Registrant the jurisdictional Officers of ISD Registrant is suppose to issue a Show Cause Notice disputing the correctness of the distribution made by the ISD. As submitted by the respondent no such Show Cause Notice has been issued to the respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 that the verification of document was not done by the Deputy Commissioner hence this ground is also rejected. 4.7 We further find that as per the ground of appeal of the revenue, the main contention is that the respondent have not complied with the contention of Para 3(III)(e) of the Notification No.12/2013-ST in as much as the refund claim in case of refund claimed under Table-II of Form A- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation 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 services to the SEZ Unit or the Developer without payment of service tax; (d) the SEZ Unit or the Developer shall furnish to the jurisdictional Superintendent of Central Excise a quarterly statement, in Form A-3, furnishing the details of specified services received by it without payment of service tax; (e) the SEZ Unit or the Developer shall furnish an undertaking, in Form A-1, that in case the specified services on which exemption has been claimed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 registration under rule 4 of the Service Tax Rules, 1994. (h) if there are more than one SEZ Unit registered under a common service tax registration, a common refund may be filed at the option of the assessee. (IV) The SEZ Unit or Developer, who intends to avail exemption or refund under this notification, shall maintain proper account of receipt and use of the specified services, on which exemption or refund is claimed, for authorised operations in the SEZ. 4. Where any sum of service tax paid on specified serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... axable 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 services other than the services used exclusively for authorised operation (used partially for the authorised operations of SEZ Unit/Developer), as approved by the Approval Committee of the _____________ SEZ [Rupees____________]. TABLE-II S. No. Description of taxable service Name and address of service provider STC No. of service provider Invoice* No. Date Value of service Service tax + cess Amt. Amount distributed to the SEZ Unit/Developer out of the amount mentioned at column No. (8) (Claimed as refund) Document* under which amount mentioned at column (9) was distributed to the SEZ Unit/Developer No. Date (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 year from the date of ISD Invoices. It is clear that without the ISD Invoices, refund cannot be filed. As per the format of Table-II in such case it is impossible to file a refund claim from the date of actual payment of service tax to the service provider therefore, the condition prescribed under clause (e) of Para 3 (III) is applicable only in respect of Table-I of Form A-4. The conditions prescribed under clause (a) to (h) are for the refund filed under Table-I & II therefore, obviously all such conditions shall not be applicable for refund made under Table-I & II both. Some conditions shall apply to Table-I and some shall apply to Table-II. For example, clause (a) shall be applicable only in respect of common service used for SEZ as well as operations in DTA where the refund has to be claimed under Table-II of Form A-4 whereas, this condition is not applicable in a case of input servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 of payment directly made by SEZ Unit and not in a case where the Head Office of the SEZ unit is making the payment. 4.10 The law clearly made distinction between the SEZ Unit and the DTA Unit of the same company. In this regard Rule 19 (7) of SEZ Rules is reproduced below:- (7) If an enterprise is operating both as a Domestic Tariff Area unit as well as a Special Economic Zone Unit, it shall have two distinct identities with separate books of accounts, but it shall not be necessary for the Special Economic Zone unit to be a separate legal entity: [Provided that foreign companies can also set up manufacturing Units as their branch operations in the Special Economic Zones in accordance with the provisions of Foreign Exchange Management (Establishment in India of branch or office or other place of business) Regulation, 2000 as amended from time to time.] From the above Rule 19(7) it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tio 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) of Para 3 (III) of Notification is applicable and there is a delay in filing the refund, the lapse is only of procedural. For that matter substantial benefit of refund cannot be denied and a liberal approach for condonation of delay needs to be taken as held by the Apex Court in the case of COLLECTOR, LAND ACQUISITION, ANANTNAG Vs. MST. KATIJI -1987 (28) ELT 185 (SC) Wherein, the following order was passed:- 3. The legislature has conferred the power to condone delay by enacting Section 5 (Any appeal or any application, other than an application under any of the provisions of Order XXI of the CPC, 1908, may be admitted after the prescribed period if the appellant or the applicant satisfies the court that he had sufficient cause for not preferring the appeal or making the application within such period) of the Indian Limitation Act of 1963 in order to enable the Courts to do substantial justice to parties by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39;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 to appeal) and the inherited bureaucratic methodology imbued with the note-making, file pushing, and passing-on-the-buck ethos, delay on its part is less difficult to understand though more difficult to approve. In any event, the State which represents the collective cause of the community, does not deserve a litigant-non-grate status. The Courts therefore have to be informed with the spirit and philosophy of the provision in the course of the interpretation of the expression "sufficient cause". So also the same approach has to be evidenced in its application to matters at hand with the end in view to do even handed justice on merits in preference to the approach which scuttles a decision on merits. Turning to the facts of the matter giving rise to the present appeal, we are satisfied that sufficient cause exists for the delay. The order of the High Court dismissing the appeal before it as time barred, is therefore, set aside. Delay is condoned. And the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. 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 hearing for a few years, an Appellant is not expected to visit the court or his lawyer every few weeks to ascertain the position nor keep checking whether the contesting Respondent is alive. He merely awaits the call or information from his counsel about the listing of the appeal. Limitation Act, 1963 (Central Act 36 of 1963)-Section 5- Principles governing condonation of delay in filing petition to set aside abatement. Held: Thus it can safely be concluded that if the following three conditions exist, the courts will usually condone the delay, and set aside the abatement (even though the period of delay is considerable and a valuable right might have accrued to the opposite party--LRs of the deceased--On account of the abatement); (i) The Respondent had died during the period when the appeal had been pending without any hearing dates being fixed; (ii) Neither the counsel for the deceased Respondent nor the Legal Representatives of the deceased Respondent had reported the death of the Respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dge Bench judgment did not refer to the line of authority which made a distinction between exemption provisions generally and exemption provisions which have a beneficial purpose. We cannot agree with Shri Gupta's contention that sub-silentio the line of judgments qua beneficial exemptions has been done away with by this 5-Judge Bench. It is well settled that a decision is only an authority for what it decides and not what may logically follow from it (see Quinn v. Leathem [1901] AC 495 as followed in State of Orissa v. Sudhansu Sekhar Misra MANU/SC/0047/1967 (1968) 2 SCR 154 at 162, 163) 24. This being the case, it is obvious that the beneficial purpose of the exemption contained in Section 3(1)(b) must be given full effect to, the line of authority being applicable to the facts of these cases being the line of authority which deals with beneficial exemptions as opposed to exemptions generally in tax statutes. This being the case, a literal formalistic interpretation of the statute at hand is to be eschewed. We must first ask ourselves what is the object sought to be achieved by the provision, and construe the statute in accord with such object. And on the assumption that a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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