2017 (2) TMI 1486 - AT - Service Tax

Refund of Service Tax - Time limitation - authorities took a view that such refund claims were required to be filed within one year from the date of issue of invoices and as such, after following the due process of law, rejected the same on point of limitation - HELD THAT - It is seen that during the appellate proceedings, the appellant relied on the Tribunal s decision in the case of COMMISSIONER OF CENTRAL EXCISE, PUNE-III VERSUS M/S COMPUTER LAND UK LTD. 2016 (2) TMI 609 - CESTAT MUMBAI . In the said decision, Tribunal has considered the same issue and has observed that unless the entire quarter is completed, the exporter cannot file his refund claim and as such, the refund claims filed within one year from the end of relevant quarter are required to be considered as having been filed well within time. Revenue is not disputing the fact that the issue stand covered by the said decision of the Tribunal. However, the appellate authority has not followed the same but simply observed that there is nothing on record to show that the same has attained finality. It is not the Revenue s case that the said decision has been appealed against by the Revenue and stand reversed. In the absence of any such fact on record, the law declared by the Tribunal was binding on the lower authorities and the Appellate Commissioner was under a legal obligation to follow the same. There are no justification for taking a different view - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Timeliness of filing refund claims under Service Tax department regulations.
2. Interpretation of the time limit for filing refund claims based on the issue of invoices or the end of the relevant quarter.
3. Applicability and binding nature of a Tribunal's decision on similar issues.

Analysis:
1. The appellant, registered with the Service Tax department, filed 5 refund claims for Business Auxiliary services and information technology software services exported by them. The claims were filed quarterly under a specific notification. The authorities rejected the claims as they believed the claims should have been filed within one year from the date of issue of invoices, not the end of the quarter, citing limitation issues.

2. During the appellate proceedings, the appellant relied on a Tribunal's decision in a similar case, where it was held that refund claims filed within one year from the end of the relevant quarter should be considered timely. The Commissioner (Appeals) acknowledged the Tribunal's decision but questioned its finality and acceptance by the department. However, the Revenue did not dispute that the issue was covered by the Tribunal's decision, indicating that the decision was binding unless appealed and reversed.

3. The appellate authority failed to follow the binding Tribunal decision, stating a lack of finality without any evidence of appeal or reversal. The law declared by the Tribunal was deemed binding on lower authorities, and the Appellate Commissioner was obligated to adhere to it. Consequently, the impugned order was set aside, and the appeal was allowed in favor of the appellant, granting consequential relief.

This judgment highlights the importance of adhering to binding legal precedents set by higher authorities, such as Tribunals, in interpreting and applying regulations. It emphasizes the significance of consistency and adherence to established legal principles in decision-making processes within the legal framework.