2015 (6) TMI 1035 - AT - Service Tax

Eligibility of refund claim - Notification No.5/2006 read with Rule 5 of CENVAT Credit Rules - Non-taxability of output services - Held that - the Hon ble High Court of Karnataka in the case of mPortal India Wireless Solutions (P) Ltd. Vs. CST, Bangalore 2011 (9) TMI 450 - KARNATAKA HIGH COURT has already held that the refund cannot be rejected on the ground of non-taxability of output service and eligibility for refund of the CENVAT credit availed on the input services which could not be utilised. Period of limitation - Eligibility of refund claim - Notification No.5/2006 read with Rule 5 of CENVAT Credit Rules - Held that - by following the decision of tribunal in the case of Apotex Research Pvt. Ltd. & others V. CC, Bangalore-CUS 2015 (3) TMI 346 - CESTAT BANGALORE , in the case of service received from abroad, the date of payment of consideration would be the relevant date for deciding the limitation. Therefore, impugned order is set aside. Matter remanded back

Summary

Issues:
1. Rejection of refund claim under Notification No.5/2006 and Rule 5 of CENVAT Credit Rules.
2. Non-taxability of output service and eligibility for refund.
3. Rejection of refund claim on the ground of limitation.

Analysis:
1. The appellant's refund claim under Notification No.5/2006 and Rule 5 of CENVAT Credit Rules was rejected due to the non-taxability of the output service and a portion of the claim being time-barred. However, the Hon'ble High Court of Karnataka in a previous case has held that the refund cannot be denied solely on the ground of non-taxability of output service. Therefore, the appeal should be allowed concerning this issue.

2. Regarding the rejection of the refund claim on the ground of non-taxability of output service and eligibility for refund, the Tribunal referred to a previous case involving service received from abroad. The Tribunal in that case had determined that the date of payment of consideration would be crucial in deciding the limitation for the refund claim. Consequently, the matter is to be remanded to the original adjudicating authority for reconsideration of the refund claim in light of this decision. Both parties agreed to this course of action.

3. In conclusion, the impugned order rejecting the refund claim is set aside, and the case is remanded to the original adjudicating authority for a fresh consideration of the refund claim, particularly focusing on the limitation aspect based on the relevant legal principles discussed in the judgment. The decision was pronounced and dictated in open court by the Technical Member handling the case.