2020 (1) TMI 1350 - AT - Service Tax

Refund of service tax - rejection of refund the ground that tax amount was not shown in the invoices and Service Tax registration was not reflected in the invoices - time limitation - HELD THAT - The only logic that can be put forth in this case is that appellant had plenty of scope to seek refund of the disputed amount before the quarter ending December, 2017 in order to cover its claim within the period of limitation. But the same logic would not sustain primarily on two grounds. First, there is no evidence on record that any refund claim was made for the previous quarter in which FIRC dated 17.01.2017 would have been included. Second and the most significant reason to negativate such logic is that the rule provided appellant to file refund claim within one year and going by the reason cited by the respondent-department, the same would expire on 16.01.2017 but it is paradoxical to the provision contained in Clause 2 of Board s Notification No. 27/2012-CE (NT) that authorised claimant to filed only one refund application in one quarter. This would extinguish the right of filing refund claim within one year by squeezing it further by atleast 16 days. The findings of the Larger Bench of the Tribunal in CCE CST, BENGALURU SERVICE TAX-I VERSUS M/S. SPAN INFOTECH (INDIA) PVT. LTD. 2018 (2) TMI 946 - CESTAT BANGALORE that the limitation period would expire at the end of the quarter remains unaltered even after the amended Notification No. 14/2016-CE (NT) dated 01.03.2016 has come in to force. The appellant is entitled to get the said refund with applicable interest which respondent-department is directed to pay within two months of the communication of this order - appeal allowed - decided in favor of appellant.

Summary

Issues:
Refund claim rejection based on limitation period expiration.

Analysis:
The appellant, a consultancy services provider, sought a refund of CENVAT credit but faced rejection for one FIRC due to being time-barred. The Commissioner (Appeals) upheld the rejection based on the amended Notification No. 14/2016-CE (NT) post the Span Infotech Pvt. Ltd. case. The appellant argued citing Rule 5 of CENVAT Credit Rules and the Span Infotech case, emphasizing the end-of-quarter date for refund claims. The appellant referenced various CESTAT decisions supporting their stance and sought to set aside the rejection.

The respondent-department defended the rejection, supporting the Commissioner (Appeals)'s decision and the amended notification. They argued against interference, stating the appellant's claim was filed after the stipulated one-year period. The Tribunal considered both sides' submissions and the case record. The Tribunal noted the appellant had ample time to claim the refund before the December 2017 quarter end but highlighted two key reasons against the respondent's argument. Firstly, no evidence existed for a previous quarter refund claim, and secondly, the limitation period would expire before the one-year mark due to the one-refund-per-quarter clause. The Tribunal upheld the Span Infotech case's findings on limitation period calculation, even post the amended notification, and allowed the appeal, setting aside the rejection.

In the final order, the Tribunal allowed the appeal, setting aside the rejection of the refund claim. The respondent-department was directed to pay the refund amount with applicable interest within two months of the order communication.