2012 (5) TMI 46 - AT - Service Tax

Delay of 17 days in filing the refund claim -services received from persons located abroad paying service tax as per the proviso of section 66A - claim of refund as per Notification No. 9/09-ST dated 3.3.09 superceded by another notification No.17/11-ST dated 1.3.11 Held that - Do not agree with the argument that the time limit under Notification dated 1.3.11 cannot be made applicable to the claims filed before that date and pending on that date - the Deputy Commissioner had power to condone the delay - the delay involved was only 17 days and when a public authority is given any power he is expected to exercise it unless there is a reason for not exercising such power - should have considered the claim as per the proviso of Notification 17/2011 ST dated 1.3.11 which was in force on the date when Order was issued - claims are not time barred and the matter is remanded to the adjudicating authority to decide the case afresh, on the merits of the claim.

Summary

Issues:
1. Interpretation of proviso to Notification No. 9/09-ST dated 3.3.09 regarding the time limit for filing a refund claim.
2. Applicability of a new notification (No. 17/11-ST dated 1.3.11) on pending refund claims filed before its enforcement date.

Analysis:

Issue 1:
The appellant, a unit in a Special Economic Zone, filed a refund claim for service tax paid to foreign service providers under the proviso of section 66A of the Finance Act, 1994. The dispute arose due to a 17-day delay in filing the claim, as per the proviso to Notification No. 9/09-ST. The appellant argued that the proviso was not directly applicable as there was no payment of service tax to the service provider located abroad. The appellant contended that the Deputy Commissioner had the authority to condone the delay. Additionally, the appellant highlighted the introduction of a new notification (No. 17/11-ST dated 1.3.11) which extended the time limit for filing refund claims to one year from the date of payment of service tax. The appellant asserted that the rejection of the claim by the lower authorities after the enforcement of the new notification was incorrect.

Issue 2:
The Revenue argued that the time limit specified in the proviso to Notification No. 9/09-ST was not applicable as there was no direct payment of service tax to the foreign service provider. The Revenue contended that the relevant date for calculating the time limit should be either the date of payment to the service provider or the date of service tax payment by the appellant. Furthermore, the Revenue claimed that the new time limit under Notification No. 17/11-ST applied only to applications filed after 01.03.2011, whereas the appellant's claim was submitted before that date.

The Tribunal analyzed the arguments and held that the time limit specified in the new notification (No. 17/11-ST) could be applied to pending claims filed before its enforcement date. Emphasizing the Deputy Commissioner's authority to condone delays, the Tribunal found the 17-day delay insignificant and directed the adjudicating authority to reconsider the claim based on the provisions of Notification 17/201ST dated 1.3.11. The Tribunal allowed the appeals by way of remand, indicating a favorable outcome for the appellant in the ongoing dispute.