2018 (5) TMI 112 - AT - Service Tax

Refund claim - time limitation - N/N. 41/2012 - Held that - The refund claim filed by the appellant of the amounts paid when they complied with the VCES scheme take the advantage of abatement on interest and penalty under the said scheme - the First Appellate Authority was correct in holding that the refund claims filed by the appellants was hit by limitation - appeal dismissed - decided against appellant.

Summary

Issues:
Refund claim under Notification No. 41/2012-ST for service tax paid on taxable services utilized for export of goods, hit by limitation.

Analysis:
The appeal challenged the rejection of a refund claim amounting to ?19,08,685 filed under Notification No. 41/2012-ST for service tax paid on taxable services used for exporting goods during 2008-2009 to 2012-2013. The claim was based on the payment made under the Voluntary Compliance Encouragement Scheme (VCES) in 2013-2014. The lower authorities rejected the claim citing limitation under the Notification and the statute. The appellant argued that the time limit of one year from the date of export specified in the Notification did not apply to service tax on services received from foreign commission agents. The appellant contended that the service tax liability arises when the tax is paid, not when the service is utilized for export. The appellant also referred to a Tribunal decision in a similar case. The Departmental Representative supported the lower authorities' findings.

Upon reviewing the submissions and records, the issue centered on the rejection of the refund claim due to being filed beyond the one-year limitation period set by Notification No. 41/2012. The appellants exported goods between 2008-2009 and 2012-2013 but did not discharge the service tax liability on commission paid to foreign nationals under the reverse charge mechanism. The appellant sought a refund after complying with the VCES scheme for the service tax paid. The First Appellate Authority correctly held that the refund claims were time-barred under the Notification's stipulated period from the date of export, not from the date of payment. The Authority's decision was upheld as legally sound and free from defects, leading to the rejection of the appeal.

In conclusion, the judgment upheld the rejection of the refund claim due to being filed beyond the limitation period specified in Notification No. 41/2012, emphasizing the importance of adhering to the prescribed timelines for refund applications. The decision highlighted the requirement to interpret notifications as per their explicit terms and not extend the timelines beyond what is expressly stated, ensuring clarity and adherence to legal provisions in such matters.