2011 (3) TMI 72 - AT - Service Tax

Claim for refund - The assessees have raised the contention that payment of commission to the agent was made only on 31.3.2008 and service tax on the same as recipient of services was paid only on 2.4.2008 and therefore refund claim is within the time limit of one year from the date of payment of service tax - Reference is made to Section 83 of the Finance Act, 1994 and since the relevant date for claim of service tax in terms of Explanation B (f) is the date of payment of service tax, refund claim filed on 19.3.2009 is within the time limit of one year stipulated under Section 11B as the service tax was paid on 2.4.2008. Further contention of the assessees is that no time limit for refund claim has been specified in Notification No.5/2006-CE, as per the decision of the Tribunal in GTN Engineering (I) Ltd. Vs CCE Coimbatore (2010 -TMI - 202608 - CESTAT, CHENNAI) - The contentions of the assessees are required to be considered afresh in the light of the case law cited by them - The Tribunals decision in GTN Engineering has been rendered subsequent to the passing of the impugned order, set aside the order of the Commissioner (Appeals) and remit the case for fresh decision to the adjudicating authority who shall pass fresh orders in accordance with law after extending a reasonable opportunity to the assessees of being heard in their defence -Thus the appeal is allowed by remand.

Summary

Issues:
1. Eligibility for refund under Notification No.41/2007-ST.
2. Time-bar for filing refund claim under Rule 5 of the CENVAT Credit Rules, 2004.

Eligibility for refund under Notification No.41/2007-ST:
The assessees sought a refund under Notification No.41/2007-ST for service tax paid on sales commission for exports. The claim was rejected by the adjudicating authority citing that the taxable service for which the claim was made was included in the notification only from 1.4.2008 onwards, thus exports before this date were ineligible for a refund. The Commissioner (Appeals) upheld this decision, emphasizing that the claim was time-barred under Section 11B of the Central Excise Act, 1944. However, the assessees contended that their refund claim fell within the one-year time limit from the payment of service tax, as per Section 83 of the Finance Act, 1994. They also argued that Notification No.5/2006-CE did not specify a time limit for refund claims, citing a relevant case law. The Tribunal acknowledged the new legal precedent and remitted the case back to the adjudicating authority for a fresh decision, granting the assessees an opportunity to present their case.

Time-bar for filing refund claim under Rule 5 of the CENVAT Credit Rules, 2004:
The lower appellate authority rejected the refund claim under Rule 5 of the CENVAT Credit Rules, 2004, due to it being filed after the quarterly period ending September 2007, despite the exports being related to shipping bills from July 2007. The authority deemed the claim time-barred under Section 11B of the Central Excise Act, 1944. In response, the assessees argued that the payment of commission and service tax was made within the time limit, and no specific time frame for refund claims was mentioned in Notification No.5/2006-CE, relying on a relevant Tribunal decision. The Tribunal, considering the new case law, set aside the appellate authority's decision and sent the case back for a fresh decision, emphasizing the need for a fair hearing for the assessees. Ultimately, the appeal was allowed by remand, granting the assessees another opportunity to present their case before the adjudicating authority.