2013 (3) TMI 275 - AT - Service Tax

Refund of service tax - notification no. 41/2007 - period of limitation - held that - Notification 41/07 is an exemption notification and the exemption is operationalised through a refund mechanism. The said notification prescribes the complete procedure and time limit for claiming the benefit thereunder. Therefore unless the conditions specified therein are satisfied including those relating to time limits, refund claims can not be entertained. The amendment made to the said notification vide notification 32/08 dated 18-11-08 is only prospective and can not be applied to the past refund claims for which claims have to be filed within the time limit stipulated therein. On the basis of an error in the clarification issued, no benefit can be claimed by the appellant. - Decided in favor of revenue.

Summary

Issues:
1. Refund claims filed for service tax paid on input services for export of goods under notification No.41/2007-ST.
2. Admissibility of refund claims based on the time limit stipulated in the notification.
3. Effect of subsequent amendment by notification No. 32/2008 ST on past refund claims.
4. Interpretation of CBEC circular regarding the revised limitation period for refund claims.

Analysis:
1. The appellant, M/s Kalyani Hayes Lemmerz Ltd., Pune, filed two refund claims for service tax paid on input services used in the export of goods under notification No.41/2007-ST. The claims were for the periods January to June 2008 and January to August 2008, totaling Rs.10,43,239/- and Rs.6,30,578/- respectively.

2. The lower adjudicating authority partially rejected the refund claims as they were not filed quarter-wise within 60 days from the end of the relevant quarter as required by the notification. The appellant appealed, and the lower appellate authority allowed claims for April to June 2008 and subsequent periods due to an amendment by notification No. 32/2008 ST. However, claims for January to March 2008 were disallowed for being filed before the amendment date.

3. The appellant argued for refund based on a circular by the CBE&C stating that refund claims for service tax on specified taxable services used for export made in the quarter March to June 2008 could be filed by December 31, 2008. The revenue authority relied on a Tribunal judgment stating that claims beyond the 60-day limit cannot be refunded under notification No. 41/07 and that the amendment by notification No. 32/08 is only prospective.

4. The Tribunal held that the conditions specified in notification 41/07, including time limits, must be met for refund claims to be entertained. The amendment by notification 32/08 is prospective and cannot apply to past refund claims. The reference to March in the CBEC circular was deemed an error, and no benefit could be claimed based on that. Consequently, the appeals were dismissed as lacking merit.

Conclusion:
The judgment upheld the strict adherence to the conditions and time limits set forth in the notification for claiming refunds on service tax paid on input services for export of goods. The retrospective application of amendments and the interpretation of circulars were clarified, emphasizing the need for compliance with the prescribed procedures for refund claims.