ST - Refund - on one hand AC accepts presence of letter seeking refund in office records but on other hand observes that same has not been receipted in office - as to how said letter travelled up to concerned file and found its way therein is not understood - Matter remanded: CESTAT
By TIOL News Service
NEW DELHI, MAY 24, 2014: THE appellants are registered with the Service Tax Department for providing various taxable services. They entered into agreements during the years 1986 to 1992 and sub-licensed its premises to different parties after accepting interest free security deposits totally amounting to Rs.1680.45 lakhs for a period of nine years and eleven months. This deposit was required to be maintained by the sub-licensee with the appellants at all times during the subsistence of the agreement and would not fetch any interest.
Pursuant to an audit conducted by the department, it was alleged that the interest received by the appellants on the security deposit amount may be considered as consideration for the use or occupancy of property and service tax should be charged on this amount. The appellants accepted the audit objection and voluntarily deposited an amount of Rs.31,32,563/- as service tax and cess alongwith interest. These amounts were paid in the months of February/March/April, 2009.
Later, the appellant realised that no service tax was payable on notional interest (as held in case of Chandravadan Desai 2002-TIOL-248-CESTAT-KOL, which judgment was upheld by Supreme Court)and, therefore, they filed refund claim of Service Tax so deposited by them.
The lower authorities rejected the claim on the ground of limitation.
Before the CESTAT it is submitted that they had filed refund application on plain paper on 12.08.2009 itself. However, subsequently they were advised by their jurisdictional adjudicating authority to file the refund claim in a proper format, which was accordingly filed by them on 18.02.2011. As such, the lower authorities have wrongly considered the dated of application as 18.02.2011 whereas the refund claim is required to be considered as having been filed on 12.08.2009. Furthermore, as no service tax was required to be deposited, the Revenue cannot retain the same and is required to refund the same without considering the time bar aspect, the appellant submitted.
The Bench observed that it is well settled that the Revenue authorities, including the Tribunal, being creature of statute are required to work within the four corners of the law and cannot go beyond it. Inasmuch as the refund, if otherwise admissible, has to meet the bar of limitation.
It was further noted -
"8. The appellant contention is that they have applied for the refund claim on 12.08.2009. The original adjudication authority has observed that the said letter dated 12.08.2009 is in the office records but has not accepted the same on the ground that there is no evidence of having received the said letter in the office. In my view, the above findings are self-contrary. On one hand the Asstt. Commissioner is accepting the presence of the refund claim application in the office record and on the other hand has observed that the same does not show the receipt. If the same was actually not filed by the appellant, I really fail to understand as to how the said letter travelled up to the concerned file and found its way therein. As such, I deem it fit to set aside the impugned order and remand the matter to the original adjudicating authority look into the said fact afresh and to decide the issue accordingly."
The appeal was allowed by way of remand.
(See 2014-TIOL-850-CESTAT-DEL)
