2016 (2) TMI 727 - AT - Service Tax

Refund claim - export of services - period of limitation - Held that - that the limitation cannot start to run unless right to receive a claim or refund crystallized. In the present case the right to claim/refund under Notification No.41/2007-Service Tax crystallized only when the service tax was deposited in October 2008. Thus the refund claim was filed within six months on 30.03.2009. - refund allowed.

Summary

Issues:
1. Time bar for filing refund claim under Notification 41/2007.
2. Interpretation of the time limit prescribed in the Notification.
3. Absence of respondent assessee during the appeal hearing.

Analysis:
1. The appeal involved a dispute regarding the time bar for filing a refund claim under Notification 41/2007. The respondent-assessee, an exporter, availed services of a commission agent for procuring export orders. The refund claim was filed for exports made between specific dates. A show-cause notice was issued by the Revenue, contending that the refund claims were time-barred. The appellant contested the notice, but it was confirmed due to the belief that the claims were beyond the stipulated time frame. The Commissioner (Appeals) allowed the appeal, emphasizing that the adjudicating authority had overstepped the show-cause notice's scope and ruled in favor of the assessee on the time bar issue, stating that the right to claim refund crystallized when the service tax was paid in October 2008.

2. The Revenue appealed on the grounds that the time limit prescribed in the Notification was six months from the quarter in which exports took place. The Tribunal, after hearing arguments from the Revenue's Assistant Commissioner, examined the issue of time bar. It referenced a decision by the Hon'ble Delhi High Court in the case of Sony India Ltd., which established that the limitation period does not commence until the right to receive a claim or refund materializes. In this case, the right to claim refund under Notification No. 41/2007-Service Tax arose only upon the payment of service tax in October 2008. Consequently, the Tribunal held that the refund claim filed on 30.03.2009 was within the permissible time frame. Therefore, the appeal of the Revenue was dismissed, and the order-in-appeal in favor of the respondent assessee was confirmed.

3. Despite the absence of the respondent assessee during the appeal hearing, the Tribunal proceeded with the case due to the respondent's previous absence without representation. The Tribunal considered the arguments presented by the Revenue's Assistant Commissioner and reviewed the records before delivering the judgment in favor of the respondent assessee. The Tribunal emphasized that the refund claim was filed within the prescribed time limit as per the interpretation of the Notification and the legal principles established by the Delhi High Court, thereby dismissing the Revenue's appeal and affirming the order-in-appeal in favor of the respondent assessee.