2017 (4) TMI 1318 - AT - Service Tax

Refund claim - export of goods - rejection on the ground that the claims were filed after a period of six months from the end of the relevant quarter during which the goods were exported - Held that - it is apparent that the refund claims were filed within six months from the end of the relevant quarter in which payment of the service tax on commission paid in respect of exported goods. The refund claim cannot be filed before the date on which service tax were remitted. The issue of time bar in this appeal is no longer res integra and is decided by this tribunal in the matter of CCE, Kanpur Vs. Pacific Leather Finishers 2016 (2) TMI 727 - CESTAT ALLAHABAD , where it was held that the limitation cannot start to run unless right to receive a claim or refund crystallized. Refund allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Availability of service tax exemption for specified services used in exporting goods.
2. Rejection of refund claims based on time bar.

Analysis:

Issue 1: Availability of service tax exemption for specified services used in exporting goods
The Appellant, a company engaged in exporting sugar mill boilers, availed service tax exemption under Notification No. 40/2007 S.T. and Notification No. 41/2007 for services like Custom House Agent Service, Business Auxiliary Service - Commission Agent service, and services provided by Banks. The present appeals focused on Business Auxiliary Service (Commission Agent Service) and the dispute revolved around refund claims related to this service. The refund claims were rejected initially, leading to appeals filed by the Appellant.

Issue 2: Rejection of refund claims based on time bar
The main contention in the rejection of refund claims was that they were filed after the stipulated period of six months from the end of the relevant quarter during which the goods were exported. However, upon closer examination, it was revealed that the refund claims were actually filed within six months from the end of the relevant quarter in which the service tax on commission paid in respect of exported goods was remitted. The Tribunal cited precedent cases to support this argument, emphasizing that the right to claim a refund crystallized only upon the deposit of service tax. The Tribunal dismissed the time bar issue based on legal precedents and allowed the appeals, setting aside the orders impugned and granting the Appellant entitlement to refunds along with interest as per the law.

In conclusion, the Appellate Tribunal CESTAT, ALLAHABAD, in the cited judgment, addressed the issues of service tax exemption for specified services used in exporting goods and the rejection of refund claims based on time bar. The Tribunal ruled in favor of the Appellant, allowing the appeals and granting entitlement to refunds along with interest.