2016 (2) TMI 365 - AT - Service Tax

Refund - service tax was paid erroneously - export of services - Period of limitation - Revenue claimed that when the appellant did not follow the route of the notification, its claim is barred by law - it had not availed exemption granted by Notification No.18/2009 - Held that - The present claim of the appellant goes to the root of section 11B which deserves consideration. Reasoning state in this order as above is fortified from the principle laid down in para 9 of the judgment of the Hon ble High Court of Allahabad. Hon ble High Court noticed in Addi Industries Ltd. 2014 (4) TMI 844 - ALLAHABAD HIGH COURT that case that the taxable services being related to the export for the period Apr, 08 to Jun. 09, appellant was even not entitled to get the refund thereof under Section 11B. No doubt, once the period of claim relates to post notification period, appellant deserves consideration. - Matter remanded back.

Summary

Issues: Claim of erroneous payment of service tax, exemption under Notification No.18/2009, refund under Section 11B of the Central Excise Act, 1944, interpretation of law, consideration of exports in different periods, applicability of High Court judgment, remand to Adjudicating authority, Doctrine of Unjust Enrichment.

Analysis:

The appellant contended that it had inadvertently paid service tax for services obtained from commission agents abroad for exporting garments, despite being eligible for exemption under Notification No.18/2009. The appellant sought a refund under Section 11B of the Central Excise Act, 1944. The Revenue argued that the appellant's failure to follow the notification's provisions barred its claim. The Tribunal noted that taxes are not meant to be exported, and if erroneously paid taxes are not refunded, they become part of the exported goods' cost, which is against the taxation principle. The Tribunal emphasized that the appellant's claim should be evaluated under Section 11B to uphold the taxation scheme's integrity.

Regarding the interpretation of law, the Tribunal highlighted that the appellate authority should have assessed the appellant's claim based on the refund provisions of Section 11B. The Tribunal referenced a judgment by the Hon'ble High Court of Allahabad, emphasizing that when a notification does not extend benefits to a claimant, no refund is permissible. However, the Tribunal distinguished the present case by noting the different export periods and stressed the need to consider the appellant's claim under Section 11B, especially for post-notification exports. The Tribunal remanded the matter to the Adjudicating authority for a comprehensive re-examination in line with the High Court's judgment and the appellant's pleadings, ensuring a fair consideration of the refund claim under Section 11B.

In conclusion, the Tribunal disposed of all appeals by remanding the matter for further review, directing the Adjudicating authority to consider the Doctrine of Unjust Enrichment and provide the appellant with a reasonable opportunity to present their case. The judgment underscored the importance of adhering to legal provisions, interpreting laws accurately, and ensuring a just resolution in matters of taxation and refunds.