Custom, Excise & Service Tax Tribunal
Roop Automotives Ltd vs Commissioner Of Gst&Amp;Cce(Chennai ... on 17 July, 2019
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CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
CHENNAI
REGIONAL BENCH - COURT NO. I
Service Tax Appeal No. 42701 of 2018
Arising out of Order-in-Appeal No. 490/2018 (CTA-II) dated 24.10.2018 passed by the
Commissioner of G.S.T. & Central Excise (Appeals-II), Newry Towers, 2054/1, II
Avenue, 12th Main Road, Anna Nagar, Chennai - 600 040)
M/s. Roop Automotives Ltd., : Appellant
Plot No. G-31, H-22, 9th Cross Street,
SIPCOT Industrial Park, Vallam-Vadagal,
Palnaliur Village, Sriperumbudur Taluk,
Kancheepuram Dist., Tamil Nadu - 631 604
VERSUS
The Commissioner of G.S.T. & Central Excise, : Respondent
Chennai Outer Commissionerate,
Newry Towers, No. 2054/1, II Avenue,
12th Main Road, Anna Nagar,
Chennai - 600 040
APPEARANCE:
Shri. Karthik Sundaram, Advocate for the Appellant
Shri. S. Govindarajan, Authorized Representative for the Respondent
CORAM:
HON'BLE MR. P. DINESHA, MEMBER (JUDICIAL)
FINAL ORDER NO. 40928 / 2019
DATE OF HEARING: 08.07.2019
DATE OF DECISION: 17.07.2019
By this appeal, the appellant has questioned the denial of
refund under Section 104 of the Finance Act, 2017.
2.1 Briefly, the appellant was allotted and leased an
industrial plot by SIPCOT for 99 years and a one-time
development charge was collected towards Service Tax by
SIPCOT. The lease deed was entered into on 13.06.2014,
Section 104 was introduced vide the Finance Act, 2017
granting retrospective exemption from taxability on the
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one-time development charges collected by SIPCOT for
the period from 01.06.2007 to 01.09.2016. Further, the
issue, in the case on hand, as canvassed by the Ld.
Advocate for the appellant, involves peculiar facts; the
service provider, a Government organization, could not
have availed benefit enuring from the newly inserted
provision, for having passed on the duty to the service
recipient - taxpayer, hence thought it fit to allow the
taxpayer claim the tax it paid and with an intention to
enable such benefit to the taxpayer, requested the
recipient, as late as after nearly five months, to make
necessary application for refund. Accordingly, the
appellant made a claim for refund of the above amount
since SIPCOT issued a letter dated 12.09.2017 expressing
its "no objection" for the appellant to claim refund.
2.2 Based on the request for refund claim, a Show
Cause Notice dated 14.03.2018 came to be issued to the
assessee-appellant wherein the Department has duly
taken note of the facts of "No Claim" certificate issued by
the service provider and also the proof of payment of
Service Tax to the Government. In the Show Cause
Notice, the Adjudicating Authority refers to Sub-Sections
(2) and (3) of Section 104 of the Finance Act, 2017,
which prescribed the date of assent of the President of
India and the time-limit for making refund claim and
thereby proposes to deny the refund as time-barred.
2.3 It is most relevant to note at this juncture that it is
not the case of the Revenue that the taxpayer had any
role in delayed procurement of "No Claim" certificate and
the relevant documents/evidences thereafter that are
necessary attachments for the refund application.
2.4 The assessee files a detailed reply along with
necessary documents, but however, vide Order-in-
Original No. 90/2018-RF dated 24.05.2018, the
Adjudicating Authority rejects the refund claim.
Aggrieved, the assessee files an appeal before the
Commissioner of G.S.T. and Central Excise (Appeals-II),
Chennai, who vide impugned Order-in-Appeal No.
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490/2018 (CTA-II) dated 24.10.2018 also rejects the
refund and the appeal by upholding the Order-in-Original
and hence, the present appeal by the assessee.
3. When the matter was called out on the date of
hearing, Shri. Karthik Sundaram, Ld. Advocate, appeared
for the assessee and Shri. S. Govindarajan, Ld. AR,
appeared for the Revenue. Upon being asked, both of
them agreed that this Bench has jurisdiction to decide the
appeal as no interpretation of any
notification/classification/valuation issue is involved.
4. The Ld. Advocate for the appellant contended that
even though refund claim is under Section 104 (3),
provisions of Section 11B alone applies and not Section
104 (3) since both are different Chapters; that Service
Tax assumes the nature of tax being paid under mistake
of law and hence, the decision of the Hon‟ble High Court
of Madras in the case of M/s. 3E Infotech Vs. CESTAT,
Chennai reported in 2018 (18) G.S.T.L. 410 (Mad.)
is applicable; that even if limitation per Section 104 (3)
applies, then the time-limit should start from 12.09.2017,
i.e., the date of communication by provider.
5.1 The main crux of the arguments of the assessee
through its Ld. Advocate is that Section 104 is under
Chapter VA of the Finance Act, 1994, whereas Section 83
falls under Chapter V of the Finance Act, 1994, and
therefore, the right of the service recipient to claim
refund is governed by Section 83 read with Section 11B of
the Central Excise Act, 1944 and not by Section 104 (3)
ibid. Further, it is his case that Section 104 (3) does not
override Section 11B since both Section 83 and Section
104 (3) fall under different Chapters and it is Section 83
that makes provisions of Section 11B applicable to
Service Tax matters as well.
5.2 In view of the above, it is the case of the assessee
that the refund application is required to be filed under
Section 11B read with Section 83 ibid. and consequently,
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the time-limit available is one year and not six months as
held by the lower authorities.
6. Rebutting the contentions of the assessee, the
arguments of the Ld. AR for the respondent are that
Section 104 being a special provision, the same has to
prevail over the regular provisions and therefore, the
time-limit of six months is very much applicable as held
by the lower authorities.
7. I have considered the rival contentions, gone
through the various documents placed on record and
have also gone through the various decisions referred to
during the course of hearing.
8.1 Section 104, which is introduced in the statute
book vide the Finance Act, 2017, reads as under :
"[SECTION 104. Special provision for exemption
in certain cases relating to long term lease of
industrial plots. --
(1) Notwithstanding anything contained in section 66,
as it stood prior to the 1st day of July, 2012, or in
section 66B, no service tax, leviable on one time upfront
amount (premium, salami, cost, price, development
charge or by whatever name called) in respect of
taxable service provided or agreed to be provided by a
State Government industrial development corporation or
undertaking to industrial units by way of grant of long
term lease of thirty years or more of industrial plots,
shall be levied or collected during the period
commencing from the 1st day of June, 2007 and ending
with the 21st day of September, 2016 (both days
inclusive).
(2) Refund shall be made of all such service tax which
has been collected, but which would not have been so
collected, had sub-section (1) been in force at all
material times.
(3) Notwithstanding anything contained in this Chapter,
an application for claim of refund of service tax shall be
made within a period of six months from the date on
which the Finance Bill, 2017 receives the assent of the
President."
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8.2 The above Section starts with a non obstante
clause operating as an exclusion clause to exclude the
charging Section 66 or Section 66B. Further, Sub-Section
(3) of Section 104 also starts with a non obstante clause,
to exclude anything contained „in this Chapter‟ i.e.,
Chapter VA per se. A possible takeaway from Section
104, read as a whole, is vide Sub-Section (1) the
applicability of charging Section is excluded and that
refund of Service Tax paid, if any, has to be claimed per
application within a period of six months from the date on
which the Finance Bill, 2017 received the assent of the
President. Clearly, Section 104 does not prescribe any
format for refund claim and perhaps the only recourse
therefore is to file such an application under Section 11B
via Section 83 of the Finance Act. It is important to note
here that the exclusion is limited to Chapter VA and not
Chapter V and hence, the operation of Section 104 (3)
starting with a non obstante clause does not exclude the
operation of any other provisions other than the ones
coming under the same Chapter (VA).
8.3 At the cost of repetition, the Section reads that
"Notwithstanding anything contained in this Chapter, an
application.... shall be made within a period of six
months...." and Section 104 does not prescribe the Form
of application for refund and for this, the only recourse is
to Section 11B qua Section 83. The Revenue may take a
stand that Section 104 (3) does not mention about the
filing of any annexures, documentary evidences, etc.,
along with an application for refund, but no statute
contemplates filing of an empty application seeking
refund, without any documents/evidences, at least to the
effect that the amount claimed as refund was in fact
remitted to the Government account. A cursory look at
the CBIC website (http://www.cbic.gov.in/resources//htdocs-
cbec/refund-rebate/refundrebate-
docs.pdf;jsessionid=E715A9021149926E0FC4240BB1DC5D13)
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contains inter alia types of refund/rebate applications and
the list of documents to be filed along with the
applications. For an application for refund is contemplated
only under Section 11B and a number of documents are
mentioned to be filed along with the prescribed format.
Hence, there may not be any difficulty in mentioning that
an application referred to is a complete application since
filing of an „empty‟ application is not an empty formality;
it has to go with all enclosures and documentary
evidences in support for enabling the appropriate officer
to understand the issue from such a complete application
and thereafter, it is for that officer to call for additional
documents/evidences, if need be.
8.4 In this context, it is very useful to refer to a recent
judgement of the Hon‟ble Supreme Court in the case of
M/s. JK Jute Mill Mazdoor Morcha Vs. Juggilal
Kamlapat Jute Mills Company Ltd. in Civil Appeal
No. 20978 of 2017 dated 30.04.2019 and at
paragraph 10, their Lordships observe as under :
"10.Even otherwise, we are of the view that.......
.
.
.
We must never forget that procedure is the handmaid of justice, and is meant to serve justice. This Court, in Kailash v. Nanhku and Ors., (2005) 4 SCC 480,put it thus:
"28.All the rules of procedure are the handmaid of justice. The language employed by the draftsman of processual law may be liberal or stringent, but the fact remains that the object of prescribing procedure is to advance the cause of justice. In an adversarial system, no party should ordinarily be denied the opportunity of participating in the process of justice dispensation. Unless compelled by express and specific language of the statute, the provisions of CPC or any other procedural enactment ought not to be construed in a manner which would leave the court helpless to meet extraordinary situations in the ends of justice. The observations made by Krishna Iyer, J. in Sushil Kumar Sen v. State of Bihar [(1975) 1 SCC 774] are pertinent:(SCC p. 777, paras 5-6) 7 "The mortality of justice at the hands of law troubles a judge's conscience and points an angry interrogation at the law reformer. The processual law so dominates in certain systems as to overpower substantive rights and substantial justice. The humanist rule that procedure should be the handmaid, not the mistress, of legal justice compels considerationof vesting a residuary power in judges to act ex debito justitiae where the tragic sequel otherwise would be wholly inequitable. ...Justice is the goal of jurisprudence --processual, as much as substantive."
29.In State of Punjab v. Shamlal Murari [(1976) 1 SCC719 : 1976 SCC (L&S) 118] the Court approved in no unmistakable terms the approach of moderating into wholesome directions what is regarded as mandatory on the principle that:
(SCC p. 720) "Processual law is not to be a tyrant but a servant, not an obstruction but an aid to justice. Procedural prescriptions are the handmaid and not the mistress, a lubricant, not a resistant in the administration of justice."
In Ghanshyam Dass v. Dominion of India [(1984) 3 SCC46] the Court reiterated the need for interpreting a part of the adjective law dealing with procedure alone in such a manner as to subserve and advance the cause of justice rather than to defeat it as all the laws ofprocedure are based on this principle."
This judgment was followed by the Constitution Bench decision in Sarah Mathew v. Institute of Cardio Vascular Diseases and Ors.,(2014) 2 SCC 62 [at paragraph 49]."
9.1 Therefore, a harmonious reading of the provisions points to one and only conclusion that though Section 104 is a special provision, it is practically dependent on Section 11B and Section 83 connects both the above provisions and thus, all procedures as in Section 11B would apply. There may be applications within six months, as contemplated in Section 104 (3), but that cannot take away the applicability of Section 11B.
89.2 The next question could well be about the word „shall‟ used in Section 104 (3). The Constitution guarantees that no tax shall be collected without the authority of law and the statute also, by way of insertion of new Section 104, has made it clear that no tax shall be collected and thereby has also provided for granting refund of such tax collected in certain special cases. So, can the authorities still hold back the tax so collected, with them, not because of the appellant being ineligible, but because of an artificial fiction? Thus, when the power itself not being there to collect the tax, retention of such tax collected is the challenge. The purpose of the very insertion of Section 104 would become redundant if such an artificial fetter is allowed to prevent the administration of beneficial legislation, by which the very purpose gets defeated. Hence, „shall‟ could and is only directory.
9.3 It is also for the other reason, as observed by me in earlier paragraphs, that Section 104 is not a self- contained one even though it is a special provision since filing application for refund and the Form required thereto not being prescribed, it rests on Section 11B and the rules and regulations therein. It is a special provision for extending the benefit and hence, when the eligibility otherwise is not questioned, the benefit cannot be denied. It cannot be said that only the limitation clause applies and not when it comes to the Form of application since it is the settled position of law that a Section has to be applied in full and that there is no scope for selective application. Hence, the Section in question has to live its life for the purpose for which it is brought in and to thus advance justice but not to defeat it. Its construction therefore, should be only to promote justice because, as observed by the Hon‟ble Apex Court (supra), it is too rudimentary that a rule or procedure is the handmaid of justice and not its mistress.
10. In view of the above discussions and on the peculiar nature of facts involved, the time-limit prescribed under Section 104 (3) is only directory, but however, the 9 time as well as the procedure prescribed under Section 11B applies in full. The Adjudicating Authority is therefore required to grant refund if the refund application is within the time-limit prescribed under Section 11B and not otherwise.
11. Accordingly, the impugned order is set aside and the appeal is partly allowed and partly remanded with specific direction, for the limited purpose of ascertaining as to whether the date of refund application satisfies the limit under Section 11B or not, and if the same is within the limit prescribed, then the refund shall have to be issued with consequential benefits, as per law.
(Order pronounced in the open court on 17.07.2019) (P. DINESHA) MEMBER (JUDICIAL) Sdd