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2015 (11) TMI 841 - HC - Service TaxDenial of refund claim - Bar of limitation - Applicability of Section 11B - Held that - Court finds that the question of applicability of Section 11B of the CE Act read with Section 83 of the Finance Act, 1994 to the refund application of the Appellant would arise only if the CESTAT came to the conclusion that the services rendered by the Appellant were in fact liable to service tax. If, on the other hand, the CESTAT finds that the services rendered by the Appellant were not amenable to service tax at all, the question of processing the refund application of the Appellant with reference to Section 11B of the Act would not arise. - CESTAT ought to have first satisfied itself that the services rendered by the Appellant was, on facts, amenable to service tax and different from the other three appeals which were heard together with the Appellant s appeal and allowed by the same impugned order. If and only if the CESTAT finds that the services rendered by the Appellant were in fact amenable to service tax would it then take up the question whether in terms of Section 11B of the Central Excise Act, 1944 and the claim of the refund was barred by limitation. - Matter remanded back - Decided in favour of assessee.
Issues:
1. Applicability of Section 11B of the Central Excise Act, 1944 to the refund application of the Appellant. 2. Whether the services rendered by the Appellant were liable to service tax. 3. Proper procedure to be followed by the CESTAT in determining service tax liability and refund eligibility. Analysis: 1. The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) dismissed the Appellant's appeal for refund of service tax, citing limitation under Section 11B of the Central Excise Act, 1944. The CESTAT applied Section 83 of the Finance Act 1994 to service tax matters, enforcing the one-year limitation period for refund claims. 2. The Appellant contended that their 'Business Auxiliary Services' provided to recipients outside India were exempt from service tax under the Export of Services Rules, 2005. They argued that their case was similar to other appeals allowed by the CESTAT, emphasizing the non-liability to service tax. 3. The High Court emphasized that the question of applying Section 11B of the CE Act to the refund application would only arise if the CESTAT determined the services provided by the Appellant were indeed subject to service tax. Referring to legal precedents, the Court highlighted the need for establishing service tax liability before addressing the limitation on refund claims. 4. The Court criticized the CESTAT for not first verifying whether the services rendered by the Appellant were taxable before considering the limitation on refund claims. It directed the CESTAT to reassess the Appellant's case and determine the service tax liability before addressing the limitation issue under Section 11B. 5. Consequently, the High Court set aside the CESTAT's order dismissing the appeal and remanded the case for a fresh decision, instructing the CESTAT to follow the proper procedure in determining service tax liability and refund eligibility. 6. The appeal was disposed of with the direction for a fresh decision by the CESTAT in accordance with the legal principles discussed in the judgment.
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