2020 (11) TMI 81 - AT - Service Tax

Rebate claim - rejection on the ground of time bar and also on the ground that the appellant have not submitted relevant GAR challans - N/N. 27/2012-CE dt. 18/06/2012 - HELD THAT - There is no dispute regarding the appellant s services qualified as export of service under Export of Service Rules, 2005. Also, in the present case, the appellant had paid the service tax on exported output services and subsequently filed rebate claim under Notification No.11/2005-CE(NT) dt. 19/04/2005 which is a self-contained code to deal with the claim filed by the appellant. Further it is found in the said Notification, no time limit is prescribed for filing rebate claim but this issue has been settled by various decisions of the Tribunal and the High Court that for claiming refund/rebate, the time limit prescribed under Section 11B of the Central Excise Act, 1944 is applicable. In the present case, the rebate claim has been filed under Notification No.11/2005-ST dt. 19/04/2005. In the said notification, no time limit is prescribed but it has been settled by the Hon ble Karnataka High Court that the limitation as provided under Section 11B of Central Excise Act would be applicable for claiming refund - Further as per the Export of Service Rules, 2005, the receipt of consideration in foreign exchange is a condition precedent for qualifying a service to be an export service - Since in the present case, the refund is filed for whole of one year i.e. for April 2006 to Marcy 2007 and hence the limitation should be computed from the end of the year i.e. from 31/03/2007 and the appellant filed the rebate application on 04/03/2008 and hence it is within time. The yearly claim filed by the appellant on 04/03/2008 is within time - Further for the purpose of verification of documents regarding the payment of service tax on export of services and the corresponding FIRCs received by the appellant, the case remanded back to the original authority for the limited purpose of verifying the documents - appeal allowed by way of remand.

Summary

Issues:
Rebate claim rejection on the ground of time bar and lack of relevant GAR challans.

Analysis:
The appellant's appeal was against the rejection of the rebate claim by the Commissioner of Central Excise(Appeals) for the period April 2006 to 3rd March 2007 due to time bar and the rejection of the claim for the remaining period due to the absence of relevant GAR challans. The appellant, engaged in providing sales support services classified as 'Business Auxiliary Service,' exported services to group entities outside India. The appellant opted to pay service tax on exported output services and claim rebate under Notification No.11/2005-CE(NT) issued under the Export of Services Rules, 2005. The dispute arose when the adjudicating authority rejected the rebate claim citing time limitations and lack of tax payment challans. The appellant argued that the time limit should be computed from the end of the period in which consideration is received for the services, and the rebate claim filed on 04/03/2008 was within time. The appellant also cited relevant case laws supporting their position.

The appellant contended that the impugned order failed to consider Notification No.11/2005-CE(NT) and relevant judicial decisions. They argued that the time limit for rebate claims was not specified in the notification, and imposing a time limit not envisaged under the notification was impermissible. Additionally, the appellant sought to treat the rebate as a refund under Cenvat Credit Rules, 2004, citing a judgment of the Hon'ble Karnataka High Court. The appellant maintained that they submitted the rebate claim for the entire financial year 2006-07 on time. They also claimed that the receipt of consideration in foreign exchange was crucial for qualifying a service as an export, impacting the computation of time limitations under the Central Excise Act, 1944.

The Appellate Tribunal found that the appellant's services qualified as export of service under the Export of Service Rules, 2005. While the notification did not specify a time limit for rebate claims, judicial precedents established that the time limit under Section 11B of the Central Excise Act applied. The Tribunal relied on the Hon'ble Karnataka High Court's decision in a similar case to support this interpretation. Considering the receipt of consideration in foreign exchange as a prerequisite for service export qualification, the Tribunal calculated the time limit from the end of the relevant year, making the appellant's rebate claim within the prescribed time. The Tribunal rejected the argument that quarterly rebate claims were mandatory, citing a Division Bench decision that allowed annual claims to avoid multiplicity. The case was remanded to the original authority for document verification, and the appeal was allowed subject to this verification.