Case Note & Summary
The appeal arose from the rejection of a refund claim under the Finance Act, 2017, concerning service tax paid on the upfront amount (premium) for a long-term lease of industrial plots from the State Industries Promotion Corporation of Tamil Nadu (SIPCOT). The appellant, a company that had taken such a lease, sought refund of service tax pursuant to Section 104 of the Finance Act, 2017, which exempted service tax on such transactions retrospectively and provided for refund of tax already collected. The President accorded assent to the Finance Act on 31.03.2017, and Section 104(3) required refund applications to be filed within six months from that date. The appellant applied for refund on 26.02.2018, attaching a certificate from SIPCOT dated 19.12.2017 confirming payment of service tax. The Commissioner of GST and Central Excise rejected the application as time-barred, counting the limitation period from 31.03.2017. The Customs, Excise and Service Tax Appellate Tribunal upheld the rejection by Final Order No.41012/2019 dated 05.08.2019. The appellant challenged that order before the High Court under Section 35G of the Central Excise Act, 1944, raising substantial questions of law on limitation. The core issue was whether the limitation period for the refund claim should be reckoned from the date of Presidential assent or from the date of issuance of the SIPCOT certificate. The appellant contended that since the certificate was a mandatory requirement to support the claim, limitation could not run before that certificate was obtained. The appellant placed reliance on the decision of the Bombay High Court in M/s JSW Dharmatar Port Pvt. Ltd. v. Union of India (2019 (20) G.S.T.L. 721 (Bom.)), which held that the limitation commences from the date of the SIPCOT certificate. The respondent argued that the statutory prescription of six months from the date of assent was absolute. The High Court examined Section 104 and the factual matrix. Noting that the refund application must be accompanied by the SIPCOT certificate and that such certificate was issued on 19.12.2017, the Court found that the application filed on 26.02.2018 was within six months from that date. Following the Bombay High Court precedent, the Court held that the Tribunal erred in dismissing the claim on the ground of limitation. The questions of law were answered in favour of the assessee. The appeal was allowed, and the respondent was directed to consider the refund application and pass orders in accordance with law within two months. No costs were awarded.
Headnote
A) Service Tax - Refund - Limitation - Finance Act, 2017, Section 104(3) - Refund claim under Section 104 of Finance Act, 2017 must be filed within six months from the date of assent of the President; however, where the statute requires a certificate from SIPCOT confirming payment of service tax to accompany the refund application, the limitation period commences from the date of issuance of such certificate - Held that the refund application filed on 26.02.2018 was within limitation as the SIPCOT certificate was issued on 19.12.2017, and the Tribunal erred in dismissing the claim on limitation grounds (Paras 8-10).
Issue of Consideration
Whether the refund claim under Section 104 of Finance Act, 2017 is barred by limitation when filed beyond six months from the date of President's assent but within six months from the date of issuance of SIPCOT's certificate confirming payment of service tax
Final Decision
The Civil Miscellaneous Appeal is allowed. The Tribunal's order is set aside. The respondent is directed to consider the appellant’s refund application and pass orders in accordance with law within a period of two months from the date of receipt of a copy of this order. No order as to costs.
Law Points
- Legal points not extracted
- Section 104 of Finance Act
- 2017 provides exemption from service tax on upfront amount for long-term lease of industrial plots by State Government industrial development corporations and enables refund of service tax already paid
- refund claim must be made within six months from date of President's assent
- but where a certificate from SIPCOT confirming payment is a prerequisite
- limitation commences from date of issuance of such certificate
Case Details
2026 LawText (MAD) (07) 27
Dr. Justice G. Jayachandran, Mrs. Justice N. Mala
Mr. N. Murali, Mr. S. Gurumoorthy, Mr. G. Meganathan
Shen Long Bio-Tech (India) Private Limited
Commissioner of GST and Central Excise, Chennai North Commissionerate
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Nature of Litigation
Civil Miscellaneous Appeal under Section 35G of Central Excise Act, 1944 against the order of the Customs, Excise and Service Tax Appellate Tribunal rejecting the appellant's refund claim of service tax under Section 104 of the Finance Act, 2017.
Remedy Sought
The appellant sought a direction to the respondent to consider its refund application for service tax paid on the upfront amount for a long-term lease of industrial plots from SIPCOT, which had been rejected as time-barred.
Filing Reason
The appellant filed a refund claim dated 26.02.2018 under Section 104 of Finance Act, 2017, which was rejected by the Commissioner of GST and Central Excise on the ground that it was filed beyond six months from the date of assent of the President (31.03.2017), as required under Section 104(3). The Tribunal affirmed this rejection.
Previous Decisions
The Commissioner of GST and Central Excise rejected the refund claim as time-barred. The Customs, Excise and Service Tax Appellate Tribunal, Chennai, by Final Order No.41012/2019 dated 05.08.2019, dismissed the assessee's appeal, upholding that the claim was barred by limitation.
Issues
Whether the Appellate Tribunal was correct in dismissing the appeal rejecting the refund application?
Whether the Appellate Tribunal was correct in applying the statutory provisions for rejecting the refund claim when the refund claim is through the Finance Act, 2017?
Whether the Appellate Tribunal is justified in rejecting the claim of refund after observing that even from the letter dated 14.09.2017 of the SIPCOT still the claim is barred by limitation, whereas it is not so and the claim is within the period of limitation?
Whether the Appellate Tribunal is correct in adopting technicalities and narrow approach when the intention/object of the Government itself is to encourage the development of Industries allotted by Industrial undertakings/Corporation?
Whether the Appellate Tribunal was correct in dismissing the appeal even if the period of limitation is calculated from the date of assent of the President which is only the minimal delay of four months and 26 days?
Submissions/Arguments
Appellant contended that the refund application was filed within six months from the date of issuance of the SIPCOT certificate (19.12.2017), which is a prerequisite for filing the claim, and thus the limitation period should be reckoned from that date, relying on the Bombay High Court decision in M/s JSW Dharmatar Port Pvt. Ltd. v. Union of India.
Respondent contended that the limitation period under Section 104(3) begins from the date of Presidential assent (31.03.2017), and the application filed on 26.02.2018 was beyond six months.
Ratio Decidendi
The limitation period of six months for filing a refund claim under Section 104(3) of the Finance Act, 2017 must be reckoned from the date on which the SIPCOT certificate confirming payment of service tax is issued, when such certificate is a mandatory annexure to the refund application, not from the date of Presidential assent.
Judgment Excerpts
...the application for refund claim should be accompanied by the SIPCOT’s certificate in confirmation of the payment of service tax. Hence, following the aforesaid dictum of the Bombay High Court, the application for refund by the appellant is construed to be within the six-month limitation.
We are of the view that the Tribunal erred in reckoning the period of limitation, which in this case commences only after the certificate by the service provider, namely SIPCOT.
Procedural History
The appellant filed a refund claim on 26.02.2018 under Section 104 of Finance Act, 2017, which was rejected by the Commissioner of GST and Central Excise as time-barred. The assessee appealed to the Customs, Excise and Service Tax Appellate Tribunal, which dismissed the appeal by Final Order No.41012/2019 dated 05.08.2019, upholding the rejection. The appellant then filed the present Civil Miscellaneous Appeal under Section 35G of Central Excise Act, 1944 before the High Court of Madras.
Acts & Sections
- Central Excise Act, 1944: Section 35G
- Finance Act, 1994: Section 66B
- Finance Act, 2017: Section 104
