2010 (9) TMI 334 - AT - Service Tax

Exemption by refund Export of goods Refund of service tax Limitation Refund claim filed on 27-5-2008 and as per notification to be filed before 28-2-2008 amendment in Notification substitution of words six months has to be treated as existing in the original notification Notification No. 41/2007-S.T. mainly relating to procedural aspect as conditions prescribed in proviso to first para Order allowing refund upheld

Summary

Issues:
1. Appeal against refund claim allowed by Commissioner (Appeals) on the ground of limitation under Notification No. 41/07-S.T.

Analysis:
The appeal before the Appellate Tribunal CESTAT, Ahmedabad involved a dispute regarding a refund claim of Rs. 8,10,805/- rejected by the original adjudicating authority on the basis of limitation under Notification No. 41/07-S.T. The Revenue contended that the claim was filed after the specified deadline of 28-2-08, as per the notification in force during the relevant period. The Revenue argued that the subsequent amendment by Notification No. 32/08-S.T. could not be given retrospective effect, citing the principle of strict construction of exemption notifications, supported by the decision in the case of Rajastan Spg. & Wvg. Mills Ltd. v. CCE Jaipur (1995). On the other hand, the respondent relied on the decision in the case of Indian Tobacco Association (2005) to assert that the substitution of time limits from two months to six months should apply retrospectively, emphasizing the word "substitution" and referring to a Board circular clarifying the extended time limit for refund claims. The respondent also argued for eligibility based on cenvat credit rules without a time limit.

The Tribunal analyzed the arguments presented by both sides, acknowledging the requirement to interpret exemption notifications strictly. However, it noted that the Board had issued a circular extending the time limit for filing refund claims for the quarter ending June 2008, thereby enlarging the scope of the notification retrospectively. The Tribunal highlighted the respondent's reliance on the decision in the Indian Tobacco Association case, where the word "substitution" was interpreted to grant retrospective benefits. The Tribunal considered the Revenue's argument that the word "substitution" could be construed as an amendment with prospective effect, but emphasized the substantive benefit involved in the present case due to the extended time limit. Ultimately, the Tribunal concluded in favor of the respondent, citing the Board's enlargement of the notification scope through the clarification and the precedent of retrospective benefit granted in the Indian Tobacco Association case.

In the final judgment, the Tribunal found no merit in the Revenue's appeal and rejected it. Additionally, the cross objection filed by the respondent was also disposed of in the same decision. The Tribunal's decision was based on a comprehensive analysis of the legal principles surrounding the interpretation of exemption notifications, retrospective application of amendments, and the substantive benefits involved in the case at hand.