2023 (2) TMI 945 - AT - Service Tax

Rejection of refund claim - rejection on the ground that the assessee s claim was not within sixty days as per Para 2(e) of Notification No. 41/2007 ibid., - non-production of certificate from the service providers to the effect that they have paid the Service Tax to the Government account - the conditions prescribed under the above Notification were not fulfilled by the assessee - HELD THAT - The issue to be decided is no more res integra. The Hon ble Supreme Court in the case of SANSERA ENGINEERING LIMITED VERSUS DEPUTY COMMISSIONER, LARGE TAX PAYER UNIT, BENGALURU 2022 (12) TMI 49 - SUPREME COURT has held, in very clear terms that It is observed and held that while making claim for rebate of duty under Rule 18 of the Central Excise Rules, 2002, the period of limitation prescribed under Section 11B of the Central Excise Act, 1944 shall have to be applied and applicable. In the present case, as the respective claims were beyond the period of limitation of one year from the relevant date, the same are rightly rejected by the appropriate authority and the same are rightly confirmed by the High Court. In view of the above guiding binding principle laid down by the Hon ble Apex Court, it is clear that the period of limitation prescribed under Section 11B shall have to be applied since Section 11B ibid. is a substantive provision in the parent statute and the subordinate legislation in the form of Notification cannot override the parent statute. Thus, the appeals filed by the parties stand covered by the decision of the Hon ble Apex Court, wherein the Hon ble Apex Court has categorically held that the time limit prescribed under the substantive legislation, namely, Section 11B, is applicable. It is also noted that even the subsequent subordinate legislation in the form of Notification No. 17/2009 dated 07.07.2009 has prescribed time-limit of one year. The assessee s claim for refund was very much in order and the denial of refund is held to be bad and contrary to the law and therefore, the impugned order is set aside - Appeal allowed.

Summary

Issues:
- Whether the appellant was entitled to the claimed refund?

Analysis:
1. The case involved an appeal against the rejection of a refund claim by the assessee related to services provided. The Deputy Commissioner proposed to reject the claim citing non-compliance with conditions under Notification No. 41/2007, lack of necessary certificates, and timing issues. The Adjudicating Authority upheld the rejection, leading to an appeal by the assessee.

2. The First Appellate Authority partially allowed the refund but deemed a portion time-barred, leading to further appeals by both the assessee and the Revenue. The main issue for determination was whether the appellant was entitled to the refund as claimed.

3. The appellant contended that the claim was not time-barred as the period should be reckoned from the end of the relevant quarter, not the date of export. They argued that the refund claim was within the one-year limit prescribed under Section 11B of the Central Excise Act, 1944.

4. The Revenue supported the lower authorities' findings, emphasizing the procedural time-limit prescribed under Notification No. 41/2007. However, the Tribunal referred to a Supreme Court judgment in M/s. Sansera Engineering Ltd. v. Deputy Commissioner, which clarified the application of Section 11B for rebate claims.

5. The Tribunal held that the time limit prescribed under Section 11B was applicable to the refund claim, as it was a substantive provision overriding procedural notifications. The Tribunal noted that subsequent subordinate legislation also prescribed a one-year time limit, supporting the applicability of Section 11B.

6. Consequently, the Tribunal found that the denial of the refund claim was contrary to the law. They set aside the impugned order, allowing the appeal filed by the assessee and dismissing the Revenue's appeal. The decision was pronounced in open court on 22.02.2023.