The Mumbai Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled in favor of the assessee, allowing them to file a refund claim with their own jurisdictional Service Tax divisional office. The claim was based on a retrospective exemption enacted by Section 103 of the Finance Act, 1994, which removed the service tax levy.
Nhava Sheva (India) Gateway Terminal Pvt. Ltd., the appellant-assessee, filed a refund claim with their own jurisdictional Service Tax divisional office, where they had previously filed their service tax returns. The core issue in the case was whether the assessee could file the refund claim with their jurisdictional officer or if it should have been filed with the jurisdictional officer of the service provider.
The assessee argued that the provisions of Section 11B of the Central Excise Act, 1944, did not specifically require the refund claim to be filed with the service provider’s jurisdictional officer. The assessee contended that in the case of an erroneous refund, the jurisdictional officer at the recipient’s end should be the one to issue a show cause notice for recovery, not the officer at the service provider’s end. The assessee, therefore, filed the refund claim with their own jurisdictional officer.
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Dr. Suvendu Kumar Pati (Judicial Member), sided with the assessee’s view and emphasized that the refund arose from a retrospective exemption enacted by Section 103 of the Finance Act, 1994, which removed the service tax levy.
This exemption, according to the Judicial Member, applied universally and did not require individual claimants to seek exemption from the tax. He noted that the assessee was not contesting any assessments but was instead seeking a refund based on a legislative change, which did not necessitate a reassessment or the involvement of the service provider.
In contrast, Mr. Sanjiv Srivastava(Technical Member) took a different stance, citing several judgments that indicated the necessity for refund claims to be filed according to the provisions of Section 27 of the Customs Act, 1962. He also referenced the case of Mafatlal Industries, where the Court ruled that a taxpayer must challenge their assessment to claim a refund.
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The Technical Member argued that the assessee should have followed the procedure for filing a claim with the service provider’s jurisdiction and that compliance with specific rules, such as Rule 6 of the Service Tax Rules, 2004, was essential, even though it applied to the service provider rather than the recipient.
However, the President of the tribunal, considering the majority opinion, agreed that the impugned order should be set aside, and the refund claim should be processed in the jurisdiction of the service recipient, i.e., the assessee’s jurisdiction. The President also directed the matter to be placed before the Regular Bench for recording of the majority order, which ultimately favored the assesse’s position.
In conclusion, the majority view held that the assessee was entitled to the refund, as they had filed the claim in their jurisdiction, and the impugned order was set aside. The assessee’s request was granted, as they had complied with the relevant conditions under Section 103 of the Finance Act, 1994, and no requirement existed to file the claim in the jurisdiction of the service provider.
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