2015 (12) TMI 949 - AT - Service Tax

Denial of refund claim - Unutilized CENVAT Credit - Rule 5 of Cenvat Credit Rules 2004 read with Notification No. 5/2006-C.E. (N.T.) - whether the lower authorities were correct in rejecting the refund claim on the ground that the same was filed beyond the period of one year - Held that - Tribunal has clearly held that the date of receipt of consideration is relevant for calculating relevant date and the limitation would be applicable as per the provisions of Section 11B and when these two principles are applied to the present case, the appellant would be eligible for refund in respect of the amounts received after 18-11-2007. Accordingly, the appeal is allowed to the extent of refund claim on the basis of receipt of payments to the services rendered from 18-11-2007 to 15-5-2008 which was not originally allowed by the Commissioner (Appeals). As regards decision in the case of mPortal 2011 (9) TMI 450 - KARNATAKA HIGH COURT of Hon ble High Court relied upon, this was considered in Apotex case 2015 (3) TMI 346 - CESTAT BANGALORE by the Tribunal - Decided in favour of assessee.

Summary

Issues:
1. Refund claim rejection based on limitation period.

Analysis:
The appellant, an STPI unit, filed refund claims for inputs services used for providing output services, as they could not utilize Cenvat credit under Rule 5 of Cenvat Credit Rules 2004. The main issue was the rejection of the refund claim by lower authorities due to being filed beyond one year. The refund claim was filed on 19-11-2008.

The appellant's representative argued that the limitation period should not apply, citing a decision of the Hon'ble High Court of Karnataka in a specific case. Additionally, they referenced a Tribunal decision to assert that the date of receipt of consideration should determine the limitation period. They contended that more refund should be allowed as consideration for services rendered was received after a certain date, not considered by the authorities.

The learned Assistant Commissioner supported the order of the Commissioner (Appeals), which rejected the refund claim based on the limitation period.

Upon review, the Tribunal found that the appellant was eligible for a refund for the period of one year before filing the claim. There were discrepancies in the order regarding the limitation date, which the appellant's representative pointed out. The Tribunal also considered the relevance of the date of receipt of consideration in determining the limitation period. Consequently, the appeal was allowed for refund claims concerning services rendered after a specific date, which were not initially approved by the Commissioner (Appeals). The Tribunal's decision was influenced by both the High Court's ruling and a previous Tribunal case, leading to the final outcome in favor of the appellant.

In conclusion, the Tribunal ruled in favor of the appellant, allowing the refund claim based on the receipt of payments for services rendered within a specified period. The decision highlighted the importance of considering the date of receipt of consideration in determining the limitation period for refund claims.