Whether refund is allowed if there’s a delay in filing claim and Separate Condonation Of Delay (COD) application not filed?

PJ/Case Law /2016-17/3327

Case-SUZLON WIND INTERNATIONAL LTD. Versus C.C.E. (APPEALS), MANGALORE

Citation- 2016(43) S.T.R. 468(Tri. – Bang.)
Brief Facts-The present appeals were directed against order-in-appeal dated 31-5-2011 passed by Commissioner (Appeals) whereby the learned Commissioner (Appeals) dismissed both the appeals of the appellant by upholding the order-in-original. Since the impugned order was common therefore both the appeals were being disposed of by this order.
The appellant was a company incorporated under the provisions of the Companies Act, 1956 and has a Unit located in Synefra SEZ. The appellant had received banking services in connection with its operation of such SEZ. In terms of Notification No. 9/2009-S.T. as amended the claim of exemption by way of refund was provided for the taxable services provided in relation to authorized operations in the SEZ and received by the SEZ developer or unit whether or not the said services were provided inside the SEZ. The appellant being an SEZ unit sought such exemption by way of refund for the period March, 2009 to June, 2009 by filing a refund application dated 7-4-2010 and for the period September, 2009 by filing a refund application dated 27-4-2010 pertaining to the taxable services i.e. banking services received by them for their authorized operations in SEZ. In response to the refund application filed, the appellant was issued show-cause notice dated 10-6-2010 by the Assistant Commissioner of Central Excise Udupi Division proposing to deny refund claim as time-barred as the same had been filed beyond six months. The above said show-cause notice was adjudicated vide Order-in-Original No. 43/2010, dated 30-7-2010/4-8-2010 rejecting the refund claim as time-barred. The appellant preferred an appeal against the order dated 4-8-2010 before the Commissioner of Central Excise (Appeals), Mangalore which was disposed of vide order-in-appeal dated 31-5-2011 upholding the order-in-original by dismissing the appeal of the appellant. Hence the present appeal.

Appellant’s Contention-Learned counsel for the appellant submitted that the impugned order was ex facie bad in law as the same had been passed in a manner contrary to the entire spirit of Notification No. 9/2009-S.T. He further submitted that the time limit of six months stipulated in Notification No. 9/2009-S.T., dated 3-3-2009 was not absolute and can be extended by the concerned authority i.e. adjudicating authority in the present case. This being a clear legal position, it was required to be appreciated that such time limit can be extended at any time before rejecting refund and as such the reasoning given in the impugned order that since the appellant had not sought any condonation before the stipulated period, and hence the refund claim was time-barred was without any merit and cannot be sustained in law. He also submitted that Notification No. 9/2009-S.T. does not state that any extension for filing of the refund claim beyond the stipulated period of six months should be made prior to filing of the refund application when the same could not be filed within the stipulated period of six months. He further submitted that the appellant requested for condoning the delay in their refund application itself and did not move separate application as he was not aware that a separate application was required because there was a lot of confusion as the scheme of refund was new. In support of his submission he relied on the decision of Rallies India Ltd.v. CC [2006 (202) E.L.T. 845 (Tri.-Del.)]. While dealing with the issue of delay in preferring the drawback brand rate application, the Hon’ble Tribunal held that a liberal approach has to be adopted by the authorities while disposing the application for condonation of delay in respect of drawback claims. He further submitted that the learned Commissioner (Appeals) failed to appreciate the fact that delay in filing the refund claim was beyond the control of the appellant inasmuch as the services covered in the subject claim are provided by the banking companies who have not issued any bills/invoices, challans while providing the services and also while receiving the services appellants were not well versed with the provisions of this new notification as to documentary requirements. The appellants also relied upon the decision of the Bangalore Tribunal in their own case vide Final Order No. 21497/2014 in Appeal No. ST/2682/2012 wherein it was held that there is no need of filing a separate request for seeking extension of time limit of six months in order to file the refund application.

Respondent’s Contention-On the other hand the learned A.R. has reiterate the findings of the Commissioner and submitted that the appellant had failed to produce necessary documents which are required for seeking extension and more over it was a discretion of the adjudicating authority to grant extension or not to grant extension depending upon whether the appellant was able to satisfy the adjudicating authority by providing sufficient documentary evidence in support of his claim.
Reasoning Of Judgement-The Tribunal heard learned counsel for the parties and perused the records. The only question to be decided in this appeal was whether a separate application was required to be filed along with refund for seeking extension of time for filing the refund application or the ground for extension of stay along with the refund application was sufficient to condone the delay in filing the application. The appellant had relied upon the decision of this Tribunal cited supra wherein it had been held that no separate application for extension of time for filing refund application was required and the prayer for extension of time can be made in the refund application itself. The appellant had also produced an order passed by Commissioner (Appeals) in their own case in Appeal No. 291/2012, dated 12-7-2012 wherein the learned Commissioner (Appeals) allowed the appeal and set aside the order passed by the Assistant Commissioner rejecting the application of the appellant on limitation and moreover, the spirit of the notification is such that a liberal approach would be adopted while considering the condonation of delay in filing the refund application. The learned appellant’s counsel’s argument that since the scheme was new and there was lot of confusion regarding the same on account of lack of knowledge, a separate application along with refund claim was not filed and keeping in view the decision of the Tribunal in the case of Rallies India Ltd.v. CC cited (supra), the Tribunal was of the considered opinion that the impugned order was liable to be set aside and the Tribunal did the same and remanded both the appeals to the adjudicating authority to decide the claim of the appellant on merits and the appellant should produce before the adjudicating authority all the documentary evidence which was in his possession to claim the said refund. With these observations, the Tribunal set aside the impugned order. Further The Tribunal directed the adjudicating authority to decide the claim of the appellant within a period of three months from the receipt of the certified copy of the order.

Decision- Appeal remanded.
Comment- The gist of the case is that no separate application for Condonation Of Delay is required in filing refund under impugned notification and the grounds mentioned on main refund application are sufficient for condoning delay. The spirit of notification was such that it requires liberal approach .Since in appellant’s own different case, such delay was condoned, refund rejection order was set aside. The matter was remanded to adjudicating authority to decide refund on merits, within three months in accordance with Section 11B of Central Excise Act, 1944.

Prepared By-Praniti Lalwani

Comments

PJ/Case Law /2016-17/3327

Post a Comment

Query