2021 (11) TMI 303 - AT - Service Tax

Refund of service tax - time limitation - refund claim filed more than 3 months in a single claim application - registration with department not availed - for the claim period no ST-3 return was filed - services exported by the appellant was not used outside India - HELD THAT - On a close reading of the provisions of Rule 5 of CENVAT Credit Rules 2004 it would clearly reveal that more than one claim application cannot be filed in a quarter but such claim is not restricted to be filed only for a quarter i.e. for 3 months in one application - Since refund can be claimed within a period of one year and Notification No. 5/2006-C.E. (NT) dated 14.05.2006 has only provided additional benefit to the Export Oriented Units and units having more than 50% export turnover to file such refund claim in each calendar month the use of word may in the said notification has made it discretionary to the claimant to choose filing refund every month as a privilege granted to the exporter but the same cannot be treated as a mandatory requirement for filing in one month or three months without which refund claim should be refused - answered in the affirmative and in favour of the appellant. Rejection on the ground that the appellant did not avail registration with the department for the period during which invoices were raised - HELD THAT -The registered premises is to be situated within the territorial jurisdiction of the Deputy/Assistant Commissioner before whom Form A application was to be filed. In the case of the applicant as reveals from case record and admitted by both the parties appellant got registered with retrospective effect from 11.08.2009 and the first refund application was filed on 30.08.2009 i.e. after the registration was completed. It is therefore immaterial to examine the date of invoices if raised before the registration date as there is no such stipulation or conditionality in Notification No. 5/2006-C.E. (NT) or to say Circular No. 120/01/2010-ST. - Further in the case of MPORTAL INDIA WIRELESS SOLUTIONS (P.) LTD. VERSUS COMMISSIONER OF SERVICE TAX 2011 (9) TMI 450 - KARNATAKA HIGH COURT it has been clearly held that registration is not a requirement for filing refund claim - refund cannot be denied on this ground. Filing of ST-3 returns periodically - HELD THAT - Admittedly this is a procedural lapse since provider of output service availing CENVAT credit shall submit half-yearly returns in the form specified in the notification but there is no express provisions that in the event of non-filing of such returns refund will be rejected except for violation of safeguards conditions and limitations set out in the Appendix of Notification issued under Rule 9 for exporters. This being the facts on record and legal position refund cannot be disallowed on this grounds. Rejection on the ground that the services exported by the appellant was not used outside India - HELD THAT - It can be said that during the relevant period as per Export Service Rule 2005 if service recipient is situated outside India and the consideration has been receipt in convertible foreign exchange it would satisfy the definition of export of services - refund cannot be denied on this ground. Rejection also on the ground that some of the input services like rent-a-cab and club or association services were not having any nexus to export - HELD THAT - Those credits were valid credits which were required to be refunded. Rejection on the ground that some invoices raised in the old address and some were time barred - HELD THAT - The address mentioned in the invoice is immaterial when the same is raised in the appellant s name when the other address is appellant s own old premises concerning which no withdrawal of registration of that premises is available on record except that a new registration is taken by the appellant for another location. The partially time barred refund claim for the period October 2009 to March 2010 which has been rejected by the Assistant Commissioner in his order dated 09.07.2012 and confirmed by the Commissioner (Appeals) needs no interference by this Tribunal. Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Rejection of refund claim by the adjudicating authority and Commissioner (Appeals) in two appeals.
- Grounds of rejection in both appeals: filing refund claim more than 3 months in a single claim application, lack of registration with the department, non-filing of ST-3 returns, inadmissible credit on certain services, and issuance of invoices at old registered address.
- Interpretation of procedural requirements for filing refund claims under Notification No. 5/2006-C.E. (NT) and Rule 5 of CENVAT Credit Rules, 2004.
- Necessity of registration with the department for claiming refunds.
- Requirement of filing ST-3 returns periodically for claiming refunds.
- Validity of refund claims related to services exported, nexus between input and output services, and time-barred claims.

Analysis:
1. The primary issue in both appeals was the rejection of refund claims due to filing more than 3 months in a single claim application. The Tribunal ruled in favor of the appellant, emphasizing that the notification allowed flexibility in filing refund claims within a year, and the word 'may' indicated a discretionary choice for exporters to file monthly claims. The rejection based on this ground was deemed incorrect.

2. Regarding the lack of registration with the department, the Tribunal clarified that registration was not a prerequisite for claiming refunds, as per the provisions of Circular No. 120/01/2010-ST and Notification No. 5/2006-C.E. (NT). The Tribunal upheld that registration was not mandatory for filing refund claims, and the rejection on this ground was unfounded.

3. The issue of non-filing of ST-3 returns periodically was raised, with the appellant citing precedents to argue against the rejection based on this ground. The Tribunal noted that while half-yearly returns were required for service providers availing CENVAT credit, the absence of such returns did not warrant rejection of refunds unless specific conditions were violated, as outlined in the notification.

4. In the second appeal, additional grounds of rejection included services exported not being used outside India, lack of nexus between certain input services and exports, and time-barred claims. The Tribunal held that if services were received outside India with payment in foreign exchange, it constituted export of services. The Tribunal also emphasized that a one-to-one nexus between input and output services was not mandatory for refund eligibility.

5. The Tribunal concurred with the rejection of time-barred refund claims but allowed the appeals in part, directing the respondent-department to pay the refunds along with applicable interest within three months. The judgments highlighted the importance of adhering to procedural requirements while acknowledging the flexibility and legal interpretations in claiming refunds under relevant laws and notifications.