2014 (4) TMI 844 - HC - Service Tax

Denial of refund claim - Bar of limitation - Whether the Tribunal was justified in not granting refund of the amount which according to the department was claimed after one year, though the entire refund claim was within time and was not hit by limitation in terms of Section 11B of the Central Excise Act 1944 under which the refund application was filed - Held that - The entire argument pre-supposes that Notification 18/2009 would apply in respect of the taxable services in relation to the exports for the period April 2008 to June 2009. Notification 18/2009 is prospective. Thereafter, the only requirement is that a return should be filed in respect of the exempted taxable service. In respect of the taxable services which were rendered in respect of the export of goods prior to the date of Notification 18/2009, that notification would have no application whatsoever. The assessee had made exports between April 2008 to June 2009. Under the relevant notification, service tax was liable to be paid and then an application for refund was required to be presented within 60 days of the end of the relevant quarter in which the goods had been exported. Once a period of limitation was prescribed in the exemption notification for submitting the refund application, that would necessarily govern. There being no appeal by the revenue against the order of the Commissioner (Appeals), the Tribunal did not disturb the finding of the Commissioner (Appeals). Hence, the Tribunal has in our view, appropriately not interfered with the finding of the Commissioner (Appeals) that the assessee was entitled to refund to the extent of one year from the date of export. - Decided against the assessee.

Summary

Issues:
1. Refund claim under Section 35G of the Central Excise Act, 1944.
2. Justification of not granting refund claimed after one year.
3. Interpretation of relevant notifications regarding exemption and refund claims.
4. Application of notification 18/2009 in retrospect to the period of April 2008 to June 2009.
5. Compliance with the limitation period for filing refund applications.

Analysis:
The judgment concerns an appeal under Section 35G of the Central Excise Act, 1944, arising from a Customs Excise & Service Tax Appellate Tribunal decision. The primary issue revolves around the justification of not granting a refund claimed after one year, despite the refund application being within the time limit specified by Section 11B of the Central Excise Act, 1944. The appellant filed a refund claim for service tax paid by mistake during April 2008 to June 2009 for services of commission agents engaged for export orders. The dispute arose due to conflicting notifications regarding the time limit for filing refund claims and exemptions.

The relevant notifications, including 41/2007, 17/2008, 17/2009, and 18/2009, provided exemptions and refund procedures for service tax paid on specified services used for exporting goods. Notification 18/2009 exempted certain taxable services, eliminating the need to pay service tax and then apply for a refund. However, this exemption was prospective and did not apply to services rendered between April 2008 to June 2009. The appellant's contention that the refund application was within the limitation period based on Notification 18/2009 was rejected as the notification did not retroactively cover the period in question.

The Commissioner (Appeals) granted the appellant the benefit of the one-year refund claim period under Notification 17/2009, even though services falling under Section 65(105)(zzb) were not covered by this notification. The Tribunal upheld this decision, as the revenue did not challenge it. The judgment emphasized that the limitation period prescribed in the exemption notification for submitting refund applications must be adhered to. Since there was no appeal by the revenue against the Commissioner (Appeals) order, the Tribunal correctly maintained the finding that the appellant was entitled to a refund for one year from the date of export.

Ultimately, the appeal was dismissed as it did not raise any substantial question of law. The judgment underscores the importance of complying with the specific timeframes and conditions outlined in exemption notifications for claiming refunds, even in cases of subsequent amendments or exemptions.