2022 (6) TMI 615 - AT - Service Tax

Refund of unutilized accumulated CENVAT Credit - time limitation - refund rejected on the ground that they have been filed beyond one year of date of invoice - Rule 5 of Cenvat Credit Rules, 2004 read with Notification No.27/2012 CE (NT) dt. 18.06.2012 - period April 2012 to December 2013 - HELD THAT - In principle the issue of limitation or time bar in the impugned order stands settled in favour of the appellants in view of the Larger Bench decision in the case of CCE CST, BENGALURU SERVICE TAX-I VERSUS M/S. SPAN INFOTECH (INDIA) PVT. LTD. 2018 (2) TMI 946 - CESTAT BANGALORE where it was held that in respect of export of services, the relevant date for purposes of deciding the time limit for consideration of refund claims under Rule 5 of the CCR may be taken as the end of the quarter in which the FIRC is received, in cases where the refund claims are filed on a quarterly basis. However, during the course of hearing learned consultant for the appellants could not produce documents to prove that the claims filed by the appellants were in time as enunciated by the larger Bench. Thus, it was not possible to verify the claim of the appellants that the respective refund applications have been filed within one year of realization of the export proceeds in the relevant quarter - this Bench will not be in a position to decide whether or not the different claims filed by the appellants are covered by the decision of the Larger Bench in the case of M/s. Span Infotech. For the limited purpose of verification of the relevant dates of realization of export proceeds and the dates of filing of the refund claims, the matter should go back to the original authority to verify the same and to grant applicable refund to the appellants in the light of the principle laid down by the Larger Bench in the case of M/s. Span Infotech - the appeals are allowed by way of remand to the original authority.

Summary

Issues:
1. Refund claims filed beyond one year of date of invoice.
2. Interpretation of relevant date for export of services.
3. Applicability of Section 11B for export of services.

Issue 1: Refund claims filed beyond one year of date of invoice
The appellants, engaged in export of services, filed quarterly refund claims under Rule 5 of Cenvat Credit Rules, 2004. The department contended that the refund claims for the period April 2012 to December 2013 exceeded the one-year limitation from the date of invoice. The original authority and appellate authority upheld the rejection of the refund claims citing previous judgments. The consultant for the appellants argued that the limitation should be reckoned from the end of the quarter when export proceeds were realized, citing relevant cases.

Issue 2: Interpretation of relevant date for export of services
The consultant for the appellants referred to Notification No.27/2012-CE (NT) dated 18.06.2012, stating that the relevant date for export of services was prescribed therein. He argued that this notification had retrospective effect based on a High Court ruling. He emphasized that beneficial notifications should be construed liberally, and substantial benefits should not be denied due to procedural conditions. He contended that Section 11B was not applicable for export of services, citing relevant cases.

Issue 3: Applicability of Section 11B for export of services
The Tribunal, after considering various judgments and the appellants' submissions, found that the issue of limitation stood settled in favor of the appellants based on a Larger Bench decision. The Tribunal highlighted the necessity to interpret provisions constructively to facilitate the objective of granting refunds of unutilized Cenvat credit. The Tribunal concluded that the matter should be remitted to the original authority for verification of the relevant dates of realization of export proceeds and filing of refund claims, in line with the principle laid down by the Larger Bench. The appeals were allowed by way of remand to the original authority for further verification and disposal of claims within a specified timeframe.

This comprehensive analysis of the judgment addresses the issues involved, the arguments presented by both parties, and the Tribunal's decision based on legal interpretations and precedents cited during the proceedings.