2019 (10) TMI 328 - AT - Service Tax

Refund of service tax - rejection on the ground that condition (b) in paragraph no. 3 of notification no. 41/2012-ST dated 29th June 2012 and of ₹ 10,57,754/- for having been sought after the period of limitation prescribed therein - HELD THAT - A special provision for discharge of tax liability by the recipient, which may not have been anticipated when the general scheme of rebate was devised, should stand in the way of the more fundamental principle that taxes should not be allowed to insinuate into the value of exports. Time limitation - HELD THAT - As pointed out by Learned Authorised Representative, the decision in which a contrary view was taken were those in which the amount claimed was not revised by a subsequent application which had the effect of enhancing the claim itself - the decision cited by Learned Counsel is not a binding precedent for advancing the date of filing of claim for the enhanced amount, and thus, bring the claim within the prescribed period. We modify the impugned order by allowing refund to the extent of ₹ 56,27,388/- while upholding the rejection of ₹ 10,57,754/- - Appeal allowed in part.

Summary

Issues:
1. Rejection of claim for refund of service tax
2. Interpretation of conditions for claiming refund
3. Applicability of limitation period for filing refund claim

Analysis:
1. The appellant challenged the rejection of their claim for a refund of service tax by the Commissioner of Customs & Central Excise (Appeals) on the grounds of ineligibility and time limitation. The claim pertained to taxes paid on services for constructing a vessel and subsequent export. The original claim was re-filed to include an enhancement amount, which was partially sanctioned. The appeal focused on the remaining amounts disputed by the authorities.

2. The appellant argued that the condition invoked for declaring them ineligible did not apply to exporters under the reverse charge mechanism. Citing a Tribunal decision and relying on legal precedents, the appellant sought relief, emphasizing that the purpose of the notification was to grant refunds for services used in exports. The Tribunal emphasized the need to interpret the notification to fulfill its intended purpose and prevent taxes from affecting export values.

3. The Authorized Representative contended that the condition of non-eligibility must be strictly enforced, and the decisions cited by the appellant regarding the limitation period were inapplicable as they involved revised applications or diminished claims. The Tribunal referred to a specific case law and highlighted the importance of not allowing taxes to impact export values, emphasizing the need to prevent literal interpretations that could hinder the refund process.

4. The Tribunal, based on the arguments presented, modified the impugned order. They allowed the refund of a certain amount while upholding the rejection of another, considering the arguments related to eligibility, interpretation of conditions, and the limitation period for filing the refund claim. The decision was made to ensure the correct application of the law and uphold the principles of granting refunds for services used in exports, while also adhering to the prescribed limitation period for such claims.