2014 (3) TMI 117 - AT - Service Tax

Refund / rebate claims - Period of limitation - Notification No. 11/2005-ST - services provided in India to international inbound roamers registered with the Foreign Telecom Network Operator but located in India at the time of providing of such services treating the supply of services as export of services under Export of Services Rules, 2005. - Held that - In view of the earlier decision 2013 (7) TMI 178 - CESTAT MUMBAI appellant should be eligible for refund of the service tax paid on input services used in or in relation to rendering of the output service which has been exported, under Rule 5 of the Service Tax Credit Rules, 2005, read with Notification 11/2005-ST. Therefore, the appellant would be eligible for the refund of service tax paid on input services. Time bar issue - Held that - the lower adjudicating authority is directed to verify the date of payment of service tax in respect of seven refund claims pertaining to the period April 2007 to April 2009 and verify whether the refund claims have been filed beyond the period of one year from the date of payment of service tax and if so, the appellant would not be entitled for any refund at all - matter remanded back.

Summary

Issues:
Refund claims rejection, Export of services, Unjust enrichment, Time-bar aspect

Refund Claims Rejection:
The case involved 9 appeals challenging the rejection of refund claims amounting to Rs. 11,32,86,358 filed by the appellant, a telecom company, for services provided to international roamers in India. The claims were filed under Notification No. 11/2005-ST, treating the services as export under Export of Services Rules, 2005. The original authority rejected the claims citing time-bar, non-export nature of services, and unjust enrichment. The appellant argued that previous tribunal decisions supported the export nature of the services, and unjust enrichment principles do not apply to export transactions.

Export of Services:
The appellant contended that providing international roaming services to inbound travelers in India constitutes export of services as per Export of Service Rules, 2005. Previous tribunal decisions and Circular No. 111/05/2009-ST supported this view. Despite challenges by the Revenue in higher courts, no stay was granted, indicating the appellant's strong case for service tax refund on input services used in exported output services.

Unjust Enrichment:
As the services were deemed export, the appellant argued that the principles of unjust enrichment do not apply to export transactions, as per Section 11B. This argument was supported by the nature of the services provided and the legal provisions governing service tax refunds.

Time-Bar Aspect:
The Revenue argued that the time-limit under Section 11B of the Central Excise Act, made applicable to service tax, should apply to refund claims despite no specific time-limit in Notification 11/2005-ST. The tribunal agreed, stating that a reasonable time-limit must be read into the law. Seven refund claims were found time-barred, while two were not. The matter was remanded to verify the payment dates for the time-barred claims.

In conclusion, the tribunal upheld the appellant's eligibility for service tax refund on exported services but remanded the time-bar issue for verification, allowing two claims and rejecting seven due to potential time-bar constraints.