2015 (6) TMI 964 - AT - Service Tax

Denial of refund claim - Bar of limitation - Held that - No limitation is prescribed for refund of accumulated CENVAT Credit under Rule 5 of Cenvat Credit Rules, 2004 as the said rule provides for refund of accumulated CENVAT Credit due to reasons of export of service, and being unable to be utilized by the assessee. Further, under the said rule, no time limit is prescribed and hence, no limitation is applicable. Thus, the ground of limitation is decided in favour of the appellant and it is held that the claim of refund is not hit by limitation. - Matter remanded back - Decided in favour of assessee.

Summary

Issues: Appeal against rejection of refund claim on grounds of limitation and quantum of refund allowable.

Analysis:
1. Limitation Issue:
The appellant, an exporter of services, filed a refund claim under Rule 5 of Cenvat Credit Rules, 2004 for unutilized CENVAT Credit. The claim was rejected by the adjudicating authority citing limitation under Section 11B of the Central Excise Act. However, the appellant contended that the limitation period should be one year from the date of duty payment under Section 11B(5)(b)(f), not from the date of purchase of goods. The appellant argued that Section 11B does not apply in this case. The Tribunal referred to the ruling of the Hon'ble Karnataka High Court in a similar case and held that no limitation is prescribed for refund of accumulated CENVAT Credit under Rule 5. Therefore, the ground of limitation was decided in favor of the appellant, and the claim was held not to be time-barred.

2. Quantum of Refund Issue:
The appellant also raised concerns about the lack of detailed examination on the merits of the refund claim by the adjudicating authority. The Tribunal acknowledged this issue and remanded the matter back to the adjudicating authority for a thorough examination of the evidence presented by the appellant. The Tribunal directed the appellant to appear before the adjudicating authority within four weeks to seek a hearing date. The appeal was allowed by way of remand for a fresh decision on the quantum of refund allowable based on the merits of the claim.

In conclusion, the Tribunal ruled in favor of the appellant on the limitation issue, stating that no time limit applies to refund of accumulated CENVAT Credit under Rule 5. The matter of the quantum of refund was remanded back to the adjudicating authority for a detailed examination of the evidence and a reasoned decision in accordance with the law.