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IN THE HIGH COURT OF DELHI
D.N. Patel, C. Hari Shankar, JJ.
Kultar Exports - Appellant
Versus
Commissioner of Central Excise - Respondent
Serta 30 of 2016
Decided On : 30-01-2020
Exemption notifications under the Central Excise Act must be strictly interpreted, and non-compliance with substantive conditions results in disqualification from benefits.
Headnote:(A) Central Excise Act, 1944 - Section 35-G, Section 11B; Finance Act, 1994 - Chapter V - Service Tax refund claim - Appellant sought refund of service tax paid on commission services, but claim was dismissed as barred by limitation and non-compliance with notification requirements. (Paras 1-20)
(B) Limitation - Appellant argued substantial compliance with Section 11B and that technical breaches should not deny benefits; however, the strict interpretation of exemption notifications was upheld, affirming that failure to comply with substantive conditions results in disqualification. (Paras 11-20)
Facts of the case:
Appellant exported goods and filed a refund application for service tax, which was rejected as time-barred by the Assistant Commissioner and upheld through successive appeals. (Paras 5-9)
Findings of Court:
CESTAT's ruling upheld on grounds of strict compliance with notification requirements and time limitations. (Paras 18-19)
Issues: Whether the CESTAT erred in ruling the refund claim was time-barred. (Para 2)
Ratio Decidendi: Exemption notifications must be strictly construed; failure to comply with essential conditions results in loss of entitlement to benefits. (Paras 18-20)
Result: Appeal dismissed.
| Table of Content |
|---|
| 1. jurisdiction and admission of appeal. (Para 1 , 2 , 8 , 9) |
| 2. details of refund application and rejection. (Para 3 , 4 , 5 , 6 , 7) |
| 3. hearing of arguments. (Para 10) |
| 4. appellant's arguments against denial of refund. (Para 11 , 12 , 13) |
| 5. respondent's defense on strict interpretation. (Para 14 , 15 , 16) |
| 6. interpretation of exemption notifications. (Para 17 , 18 , 19) |
| 7. final conclusion dismissing the appeal. (Para 20) |
JUDGMENT
D.N. Patel, Chief Justice (Oral)--This Appeal has been preferred under Section 35-g of the CENTRAL EXCISE ACT , 1944 (hereinafter "the Act") read with Section 83 of Chapter V of the FINANCE ACT , 1994, by the Appellant - M/s Kultar Exports through its partner, Sh. Kultar Singh against the judgment and Final Order dated 9th October, 2015 passed by the Customs, Excise and Service Tax Appellate Tribunal, Principal Bench, New Delhi (hereinafter "CESTAT") in Service Tax Appeal No. ST/3965 of 2012 whereby CESTAT upheld the Order passed by Commissioner (Appeals), Central Excise, Delhi-I dated 6th September 2012.
2. This Appeal was admitted by this Hon'ble Court vide Order dated 10th February, 2017,whereby the following question of law was framed:
"Did the CESTAT fell into error in holding that the Appellant was not entitled to refund on account of bar of limitation in the facts and circumstances of the case?"
3. The Appellant M/s Kultar Exports is the exporters of general merchant goods like fabrics, readymade garments artificial jewellery etc. The Appellant exported goods i.e. educational books in the months of July 2008 to March 2009 wherein the Appellant allegedly received services from a foreign commission agent and service tax was paid on a reverse charge
4. The Appellant on 10th December, 2010, filed an application for refund basis. Pursuant to the same, the Appellant filed ST-3 returns on 15th June, 2010 of the payment of service tax of Rs.16,103, for the period of July 2008 to September 2008 and Rs.6,83,112 for the period of October 2008 to March 2009 under Notification No. 41/2007-ST dated 6th October 2007 (amended by the notification No. 17/2008-ST dated 1st April 2008) wherein vide the amendment, S.No. 15 was added in the Schedule providing for exemption on taxable services of a commission agent located outside India obtained by an exporter in India for sale of goods, claimed refund as per exemption under S. No. 15 of the said notification.
5. The application of the Appellant was rejected by the Assistant Commissioner (Excise) vide Order dated 28th January, 2011, holding that apart from not having submitted the requisite documents as stated in the aforesaid notification, No. 41/2007-ST, the appellant's claim was time barred as having not been submitted within the prescribed period of six months from the end of the relevant quarter when the goods have said to have been exported. The Assistant Commissioner noted that the Appellant had failed to fulfil the conditions as required under Notification No. 41/2007 - ST, and thus dismissed the application.
6. The Appellant thereafter, filed an Appeal against the same, which was dismissed by the Commissioner (Appeals) vide Order dated 6th December, 2009 noting the non-compliance with the substantive requirements of clause 2 (e) of the Notification No. 41/2007-ST of submitting the requisite documents within the time as stipulated in the said notification, and thus being time barred.
7. Moreover, the Commissioner has noted that as per the Circular No. 112/06/2009 - ST dated 12th March 2009 wherein it has been so clarified that the limitation period is to be computed form the date of the exports, the application by the Appellant was time barred and thus did not comply with the substantive condition given in the Notification.
8. The Appellant challenged the aforementioned Order-in-Appeal before CESTAT, which, by its Final Order and judgment dated 9th October, 2015 upheld the Order by Commissioner Appeal and held that the Appellant'
