2018 (8) TMI 1100 - AT - Service Tax

Refund claim - time limitation - whether limitation u/s 11B shall apply in case refund claim is filed by the appellant under Rule 5 of CCR read with N/N. 05/2006-CE (NT) dated 14.03.2006? - Held that - The period of one year will be reckoned not from the date of receipt of foreign exchange but from end of the quarter in which the foreign exchange is received - the period of one year shall be computed from the end of the quarter wherein foreign exchange/FIRCs received - appeal allowed by way of remand.

Summary

Issues involved:
1. Interpretation of limitation under Section 11B in a refund claim under Rule 5 of Cenvat Credit Rules, 2002 with Notification No. 05/2006-CE (NT) dated 14.03.2006.

Analysis:
The judgment by the Appellate Tribunal CESTAT Ahmedabad addressed the issue of whether the limitation under Section 11B applies to a refund claim filed under Rule 5 of Cenvat Credit Rules, 2002 along with Notification No. 05/2006-CE (NT) dated 14.03.2006. The Adjudicating Authority initially held that the one-year limitation period should commence from the date of issue of the invoice. However, the Commissioner (Appeal) differed, stating that the relevant date is the receipt of convertible foreign exchange. The matter was remanded by the Commissioner (Appeal) for further verification. The appellant challenged this decision in the present appeal.

The appellant's counsel argued that Section 11B does not apply to the refund of accumulated Cenvat credit under Rule 5. He contended that the Commissioner (Appeal) was wrong in requiring the refund claim to be filed within one year from the realization of convertible foreign exchange. The counsel cited relevant judgments to support this argument. On the other hand, the Revenue's representative supported the findings of the impugned order and distinguished the judgments relied upon by the appellant, referring to a specific case.

Upon careful consideration of the submissions, the Member (Judicial) referred to a Larger Bench judgment by the Tribunal in the case of Span Infotech (India) Pvt. Limited, which clarified that the limitation under Section 11B is indeed applicable to refunds under Rule 5. The relevant date for the limitation was determined to be within one year at the end of the quarter following the receipt of convertible foreign exchange. The Member noted that the Commissioner (Appeal) had erred in his interpretation, as the period of one year should be calculated from the end of the quarter in which the foreign exchange is received, not from the date of receipt. Consequently, the order of the Commissioner (Appeal) was modified accordingly.

In conclusion, the appeal was allowed, remanding the matter back to the Adjudicating Authority for a fresh order in line with the observations made in the judgment.