2018 (1) TMI 423 - AT - Service Tax

Refund claim - rejection mainly on the ground of time bar - Held that - The appellants claim that within six months from the date of payment of service tax to the service provider consequent to the raising of the invoices by the service provider, the refund claims were filed; the facts need to be verified - the claim of payment of service tax to the service provider on which refund was claimed also needs to be verified. Refund claim relating to telephone services installed in the premises - Held that - The telephone services are used in receiving calls from outside and also used in calling outside number as a part of the communication in performance of its business - rejection of refund set aside. Appeal allowed by way of remand.

Summary

Issues:
Refund claims rejection under Notification No. 09.2009-ST and 15/2009-ST for specific periods - Time-barred refund claims - Rejection based on proof of payment and utilization within SEZ premises - Verification of payment and utilization - Eligibility of refund claims for telephone services.

Analysis:
The appeals were filed against orders-in-appeal by the Commissioner of Central Excise (Appeals) Ahmedabad, upholding the rejection of refund claims under Notification No. 09.2009-ST and 15/2009-ST. The appellant contested the rejection of amounts related to specific periods, arguing against the grounds of rejection. The rejection was based on services not fully utilized within SEZ premises and lack of proof of payment. The Chartered Accountant for the appellant argued that telephone expenses for receiving calls from outside were part of business and not solely confined to SEZ units. Regarding the rejection of refund claims due to time-bar, the appellant claimed that the claims were filed within six months of payment to the service provider, necessitating verification of facts and payment. The rejection of refund claims for telephone services was also challenged as unsustainable, given their usage in business communication.

The Appellate Tribunal found that a significant portion of the refund claims was rejected on the basis of being time-barred. The appellant's assertion of filing claims within six months of payment required verification, as did the proof of payment to the service provider. The rejection of refund claims related to telephone services was deemed unsustainable, as these services were used for both internal and external communication in business operations. Consequently, the rejection of refund claims for specific amounts was set aside, and the matter was remanded to the adjudicating authority for verification based on the observations made. The appeals were partly allowed, emphasizing the need for thorough verification regarding payment, utilization, and eligibility of refund claims.