2019 (8) TMI 1025 - AT - Service Tax

Refund of unutilized credit - time limitation - export of services - Section 11B of the Central Excise Act, 1944 - HELD THAT - As per Section 11B of the Central Excise Act, 1944, the relevant date for computation of period of one year in the case of export of services is not mentioned. The said section deals only with relevant date in cases of export of goods - In the present case, the issue is with regard to computation of the period of limitation in case of export of services. The rejection of refund claims on the ground that it is time-barred is unjustified. The refund claims are within time. Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Rejection of refund claims under Rule 5 of Cenvat Credit Rules, 2004 read with Notification No.27/2012 (CE-NT) on the grounds of being time-barred.

Analysis:
The appellants filed appeals against the rejection of their refund claims under Rule 5 of Cenvat Credit Rules, 2004. The appellants, engaged in providing Engineering, Design, and Drawing Services to a foreign entity, filed refund claims for unutilized credit. The refund claims were rejected by the sanctioning authority as time-barred, calculating the period of one year from the date of issue of export invoices. The appellants argued that the relevant date for computing the period in the case of export of services should be the date of realization of foreign exchange, relying on precedents such as the decision of the Larger Bench of the Tribunal in CCE Service Tax Vs Span Infotech (India) Pvt. Ltd. The appellants also cited decisions from the Chennai Bench of the Tribunal to support their argument. On the other hand, the respondent supported the findings in the impugned order, referring to a decision of the High Court regarding the computation of the relevant date from the date of export.

The Tribunal noted that Section 11B of the Central Excise Act, 1944 does not specify the relevant date for the computation of the period of one year in the case of export of services, as it primarily deals with the relevant date in cases of export of goods. The Tribunal distinguished the issue at hand from cases related to the export of goods. Following the Tribunal's Larger Bench decision in the case of Span Infotech (India) Pvt. Ltd., the Tribunal held that the rejection of refund claims on the grounds of being time-barred was unjustified. It was concluded that the refund claims were within the permissible time limit. Consequently, the impugned orders were set aside, and the appeals were allowed with any consequential benefits as per the law.

This judgment clarifies the computation of the period of limitation in cases of export of services and provides guidance on determining the relevant date for such calculations. The decision reinforces the importance of considering specific circumstances and legal provisions applicable to the export of services when assessing time limitations for refund claims under the Cenvat Credit Rules, 2004.