2015 (11) TMI 349 - AT - Service Tax

Denial of refund claim - Bar of limitation - whether the appellant is eligible for the refund of an amount paid by them as service tax on the services exported under the category of Business Auxiliary Services and Business Support Services to an entity in Germany and Yugoslavia - Held that - Relevant provisions of Notification, the conditions and limitations for granting the refund of the service tax paid on services exported are that the taxable service should have been exported and the payment for such services should have been received in convertible foreign exchange; that the service tax and cess have been paid on taxable service exported. In the case in hand there is no dispute as to the services have been exported and the payment has been received in a convertible foreign exchange. It is also undisputed that the amount of service tax liability on the services exported are to be paid on or before 5th January 2010 for the services exported in the month of December 2009 and such tax liability is paid by the appellant. The relevant date for refund in the case of rebate should be, in our view from the date of payment of service tax on the taxable services exported. - Impugned order which upholds the rejection of refund claim of ₹ 23,29,471/- is incorrect and the appellant s appeal needs to be allowed - Impugned order is set aside - Decided in favour of assessee.

Summary

Issues:
1. Eligibility for refund of service tax on exported services.
2. Time limit for filing refund claim under Notification No.11/2005-ST.

Eligibility for Refund of Service Tax on Exported Services:
The appeal revolved around the eligibility of the appellant for a refund of service tax paid on services exported under 'Business Auxiliary Services' and 'Business Support Services' to entities in Germany and Yugoslavia. The appellant filed a refund claim for a specific amount, which was partially sanctioned by the authorities while rejecting a portion of the claim on the grounds of limitation. The dispute centered on the timeline of filing the refund claim in relation to the receipt of payment for the services exported in December 2009. The appellant contended that they discharged the service tax liability in January 2010 and filed the refund claim in January 2011, within one year. However, the Revenue relied on a previous Tribunal judgment stating that the refund should be considered based on the date of receipt of foreign inward remittance. The Tribunal found the Revenue's arguments untenable for various reasons, including the conditions specified in Notification No.11/2005-ST for granting a refund on exported services.

Time Limit for Filing Refund Claim under Notification No.11/2005-ST:
The Tribunal analyzed the relevant provisions of Notification No.11/2005-ST, emphasizing that the conditions for granting a refund of service tax on exported services include the export of taxable services and receipt of payment in convertible foreign exchange. The Tribunal noted that the service tax liability for the exported services should be paid before the 5th of January 2010 for services exported in December 2009, which the appellant had complied with. Additionally, the Tribunal referred to a previous case involving a similar issue, where it was held that refund claims filed beyond one year from the date of payment of service tax are liable to be rejected. Based on these considerations, the Tribunal concluded that the rejection of the appellant's refund claim was incorrect, and the appeal was allowed in favor of the appellant.

In conclusion, the Tribunal set aside the impugned order upholding the rejection of the refund claim and allowed the appellant's appeal with consequential relief.