2019 (1) TMI 72 - HC - Service Tax

Refund claim - exemption under Notification dated 06.10.2007 - duty drawback on service tax paid - Held that - Admittedly, the appellant is claiming refund under the Notification No.41/2007-ST dated 06.10.2007, in which there is Condition No.1 (e), which provides that refund would not be admissible, if the goods have been exported under the chain of drawback. The said restriction was removed on 07.12.2008 vide Notification No.33/2008-ST dated 07.12.2008. Admittedly the refund claimed by the appellant pertains to the period from July, 2008 to September 2008, which is prior to removal of restriction. The appellant is not entitled for refund claim under the Notification No.41/2017-ST dated 06.10.2007 because restriction was removed on 07.12.2008 vide Notification No.33/2008-ST and the refund claim relates to the period from July, 2008 to September 2008, which is prior to the removal of restriction. Appeal dismissed.

Summary

Issues:
1. Challenge to order denying refund claim under Central Excise Act, 1994.
2. Interpretation of Notification No.41/2007-ST for exemption eligibility.
3. Applicability of restriction on refund claims under Notification No.41/2007-ST.

Analysis:
1. The appellant filed a central excise appeal challenging the order denying their refund claim under Section 35G of the Central Excise Act, 1994. The appeal stemmed from the denial of the refund claim by the Assistant Commissioner, which was subsequently rejected by the Commissioner Customs & Central Excise (Appeals) and the CESTAT, New Delhi. The appellant contended that the orders passed by the authorities below were incorrect and unsustainable, emphasizing their entitlement to the refund under Notification No.41/2007-ST.

2. The crux of the argument revolved around the appellant's claim for exemption under the Notification dated 06.10.2007. The CESTAT, New Delhi, relying on its judgment in a specific case, held that the appellant was not eligible for exemption. The appellant's counsel argued that the denial of refund was unjust as the appellant had not availed drawback on the service tax paid on the services for which the refund was sought. The dispute centered on the interpretation of Notification No.41/2007-ST and whether the appellant met the criteria for the refund claim.

3. The court examined the applicability of the restriction on refund claims under Notification No.41/2007-ST. It was noted that Condition No.1 (e) of the notification stated that refund would not be admissible if the goods had been exported under the chain of drawback. This restriction was removed on 07.12.2008 through Notification No.33/2008-ST. As the appellant's refund claim pertained to the period before the removal of the restriction (July 2008 to September 2008), the learned CESTAT rejected the appeal based on the timeline of the refund claim and the removal of the restriction.

In conclusion, the court held that the appellant was not entitled to the refund claim under Notification No.41/2007-ST due to the removal of the restriction on refunds after the period in question. Consequently, the court dismissed the appeal, stating that no substantial question of law emerged for consideration in this case.