Refund cannot be Rejected  when Assessee Produced Sufficient Documents to Prove Payment of Service Tax: CESTAT [Read Order]

In a significant case, the Bangalore bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that refund cannot be rejected when the assessee produced sufficient documents to prove payment of service tax.

Meck Mills Private Limited, the appellant has taken industrial land on a long-term lease from Kerala Industrial Infrastructure Corporation (KINFRA), a Kerala State Government Undertaking. The appellant paid an upfront amount on a long-term lease with Service Tax to KINFRA, who in turn paid the service tax to the Government.

In Finance Act, 2017, Section 104 was inserted in Chapter V of Finance Act 1994 with retrospective effect. As per this section no service tax, leviable on one time upfront amount 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 30 years or more of industrial plots, shall be levied or collected during the period commencing from 1st June 2007 and ending with 21st September 2016.

The appellant filed a refund claim of service tax amounting to Rs. 3,38,368/- (Rupees Three Lakhs Thirty-Eight Thousand Three Hundred and Sixty-Eight only) paid by them on the upfront amount on a long-term lease of industrial land. The claim was rejected by the adjudicating authority vide Order-in-Original dated 26/12/2007.

Aggrieved by the order the appellant filed an appeal before the Commissioner (Appeals), who upheld the order of the original adjudicating authority. Aggrieved with the order of the first appellate authority, the present appeal is filed.

A single member coram comprising Mr Pullela Nageswara Rao, Member (Technical) observed that the first appellate authority rejected the refund claim was that the appellants did not produce the documents namely invoices/bills evidencing that they have paid service tax through KINFRA and non-availment of Cenvat credit.

Since the appellant produced sufficient documents to prove that they have paid the service tax and have not availed or passed on the Cenvat credit, the CESTAT set aside the impugned order and allowed the appeal. 

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