In such cases, therefore the following action is advised. It would be the responsibility of the concerned Commissioner to obtain stay order expeditiously where the orders passed by Commissioner Appeals suffer from serious infirmities and it involves grant of heavy refunds. In all other cases, not involving any dispute, refund applications should be processed on merits speedily and a decision taken within a period of three months from the date of application to avoid any interest liability- where refund is held admissible.
Refund of deposits made under Sec. All pending refund applications already made under the relevant provisions of the Indirect Tax Enactments for return of such deposits and which are pending with the authorities will also be treated as simple letters asking for return of the deposits, and will be processed as such. Similarly, bank guarantees executed in lieu of cash deposits shall also be returned.
A receipt of the cheque should be obtained from the payee and placed on file. However, in terms of risk to revenue, a monetary limit of Rs. This shall also enable the department to focus on the cases where amount sanctioned is higher than Rs. Since the claim is pre-audited with the concurrence of Commissioner, the usual review proceedings under section 35E may not be necessary in such case.
The Orders-in-Original shall also be subjected to review under section 35E. However, in case the sanctioned amount is less than the claimed amount, O-in-O should invariably be issued. As Orders-in-Originals are not being passed in such smaller cases except when not sanctioned in full , it may not be necessary to subject these sanction orders to review under section 35E.
Nos ii and iii of Para 8. The cell should complete the post audit before the expiry of three months from the date of payment. The cell would also monitor and point out any missing Orders-in- Original by tracking the serial number and other relevant details. Woodcrafts Products Ltd. A system of monitoring has been set in place to ensure timely payment of refund claim within a month of the application.
II dt. One of the conditions mentioned in these circulars is that the refund claims from diplomatic missions should be entertained by the Central Excise officers only if they are filed within 3 months from the date of purchase of the motor vehicle.
Claims filed beyond three months were not to be admitted without reference to the Ministry of Finance. After the recent amendment o Sec. It has been pointed out that this discrepancy between the time limit prescribed in the statute 1 year and the time limit 3 months mentioned in Board's instructions of and , is creating confusion in the field. In the past, refunds on purchases by diplomatic missions were being granted, either as an ex-gratia payment, or on the basis of ad-hoc exemption orders.
Being ex-gratia payment, the time limit for claiming refund was scribed through the above executive instructions and in a number of cases relaxations were also granted. Subsequently, from , Ministry declined to re the time limit beyond that statutorily prescribed then six months. Subsequently, when the provisions of section 5A 2 relating to ad-hoc exemptions were amended in to limit its coverage to goods for charitable purpose or of strategic or secret nature only, ad-hoc exemptions to diplomatic missions could no longer be given under section 5A 2.
It was then decided to issue a general exemption notification to cover such cases. This was done for the first time by notification No. The relevant notification which presently allows exemption to goods supplied to diplomatic missions is notification No.
This notification grants full exemption to all goods and not merely motor vehicles supplied for the official use of foreign diplomatic or consular missions in India. The exemption is subject to condition 45 of the notification which, inter-alia, requires production of a certificate from the Protocol Division of the Ministry of External Affairs and an undertaking from the diplomatic mission that they will produce, within a period of 3 months or such extended period, a certificate that the goods have been put to the specified use.
There is also a condition that the said goods cannot be disposed of before the expiry of 3 years from the date of clearance of the goods.
It may be noted that earlier, exemption was available through executive instructions and ad-hoc exemption orders to goods including cars meant both for official as well as personal use of the mission or its staff. There seems to be no justification, now, for continuing the old Circulars of and In view thereof the Circulars of and of have been withdrawn. Refunds would therefore be governed entirely by the conditions mentioned in notifn. No extension beyond 1 year from the date of purchase would be permissible as this time limit is statutorily prescribed.
Cases need not, therefore, be referred to the Ministry for relaxation or extension of this time limit. The missions are, obviously, free to clear the excisable goods straight from the factories, without payment of duty, after satisfying the conditions of the above exemption notification. In that case there would be no case for claiming any refund. It may be pointed out that petrol is also one of the items on which refunds are sanctioned to diplomatic missions.
Similarly, Notification No. Exemption under both the notifications will apply only to new units set up or after or to units undertaking substantial expansion on or after this date. The exemptions are available for a period not exceeding 10 years from or commencement of commercial production. The exemptions are on the lines of the notifications issued for North Eastern States under Notification No.
For this purpose, a cth1e mechanism has been incorporated in the notifications. The manufacturer is first required to pay the excise duty and thereafter, whatever is paid in cash is to be refunded. It is also intended that the user of any input or capital goods on which such exemption has been availed should get the full Cenvat credit including the portion of duty refunded to the manufacturer of such input or capital goods.
In this context, it may be pointed that the "Refund" envisages in the notifications is not on account of any excess payment of excise duty by the manufacturers, but is basically designed to give effect to the exemption. In other words, the mechanism has been adopted to operationalise the exemption envisaged in these two notifications. In view of this aspect of the matter, the provisions of Section 11B of the Central Excise Act, would not apply in the case of these notifications.
The notifications provide for expeditious refund of duty paid in cash. It is for this reason that a provision has been made for allowing refund even on provisional basis by the 15th of the next month, in case there is likely to be a delay in verification of the refund claims. Any excess or shortfall in case of refund allowed on provisional basis may be adjusted in the subsequent refund claims.
Considering the fact that verification of refund claims basically involves checking of duty paid in case, in most cases it should be possible to allow refund the 15th of the subsequent month. The Board is of the view that pre-audit of refund claims of more than Rs. If it is possible to pre-audit, and the finalisation of claim could be completed before the 15 th of the next month, it may be resorted to.
Otherwise, the initial provisional refund maybe allowed without pre-audit and while deciding upon its finalisation, pre audit and while deciding upon its finalisation, pre-audit may be done. It may be noted that the notifications apply to goods cleared from a factory. As such, they do not apply to goods cleared from the warehouses. Problems, if any, faced in this regard may please be brought to the notice of the Board. As regards the date of commencement of production, the Department of Industries of the State Government may be consulted who should be in a position to advise on this aspect.
Normally, if a unit has been undertaken substantial expansion in capacity, it would utilise the expanded capacity and not keep it idle. There could, however, be a case where a unit discontinues production on newly installed machinery or may later on decrease the capacity of production.
Such cases may have to be examined carefully in more detail. In case of air travel agent, the board has clarified that in respect of cancelled tickets no separate refund claim to be made. Instead based on the fortnightly returns, submitted to airline companies showing gross bookings, cancellations and net bookings, service tax can be paid only on net bookings. Refund application can be filed by any person who has born the incidence burden of service tax.
In all the circumstances, the person filing an application must satisfy that he has not passed on the burden of service tax to another person.
Refund application in duplicate must be lodged with the Assistant Commissioner or Deputy Commissioner of Central Excise, as the case may be having the jurisdiction over the person claiming refund claim.
A copy of the same, need to be marked to Range Superintendent. Refund application must be submitted with the correct jurisdiction. An application submitting with the wrong jurisdictional officer cannot be held valid and no refund claim shall be allowed to him on that basis. Refund application may be submitted in a simple letter along with Form R. It should be signed by claimant and pre receipted with revenue stamp.
A person filing refund application must attach all the documents and evidences with the Form R to justify that he is entitled to claim the refund and burden has not been passed on. In case adjudication order is issued which is against the assessee, appeal need to be filed.
Mere refund claim will not be sufficient. A refund application must be filed with the prescribed time limit form the relevant date. Any application filing beyond the prescribed time limit, shall be treated as never been filed and must be rejected.
Relevant date has been defined in the Explanation B to section 11B of the C. E Act. And accordingly the relevant date shall be. In case refund due to consequence of judgement, decree, order or direction of appellate authority or any court.
No person shall be allowed to collect the duty from the both ends. Section 12B puts a heavy burden on the person claiming refund from the department to prove that the provisions of Section 12B are not applicable on him and he is entitled to get the refund. He has to prove that the incidence of service tax has been born by him. In certain cases, it may happen that the levy of duty or tax has been held as unconstitutional. In such circumstances also, the refund shall be subject to doctrine of unjust enrichment.
Refund through credit not has been specifically recognized and permitted in service tax refer rule 6 3 of Service tax rules. In such case, incidence of duty cannot be assumed as passed on to purchaser. Doctrine of unjust enrichment does not apply, refund is not deniable.
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