2015 (2) TMI 347 - AT - Service Tax

Denial of refund claim - SEZ developers - notification No. 15/2009-ST dt. 20.5.2009 - period of limitation - Held that - the intention of legislation was that if any service tax has been paid by unit which was not required to pay service tax does not mean is not is entitled for refund claim. The intention of the legislature is that the person providing services is not required to pay service tax. Therefore, the Revenue has misinterpreted the notification No. 15/2009 ibid to deny the refund claim. The same issue came up before this Tribunal in the case of Tata Consultancy Services Ltd. Vs. Commr of Ex. & S.T. (LTU), Mumbai reported in 2012 (8) TMI 500 - CESTAT, MUMBAI Refund claim of ₹ 21,451/- has been denied to the appellant as time bar. I find that similar issue came up before this Tribunal in the case of Raymond Ltd. (2014 (3) TMI 45 - CESTAT MUMBAI) wherein Tribunal has held time limit prescribed as per Section 11B has been applicable. It is not in dispute that appellant has filed refund claim within the time limit prescribed under Section 11B of the Act. Therefore, I hold that the refund claim of the appellant is within time, as both the issues have been decided in favour of the appellant. Therefore, I set aside the impugned order - Decided in favour of assessee.

Summary

Issues:
1. Entitlement to refund of service tax paid within SEZ.
2. Time limit for filing refund claim.

Entitlement to Refund of Service Tax Paid within SEZ:
The appellant, an SEZ developer, filed a refund claim for service tax paid on services used for authorized operations in the SEZ. The claim was rejected citing Notification No. 15/2009, which exempts services wholly consumed within the SEZ from service tax. The appellant contended they were entitled to a refund based on precedents like Tata Consultancy Services Ltd. case. The Tribunal held that the legislative intent was not to deny refunds for services not requiring tax payment. Refund claims within one year of service tax payment were deemed valid, as per Section 11B of the Central Excise Act, 1994. The Tribunal emphasized that the appellant's services were related to SEZ operations, and the refund claim was timely, leading to a ruling in favor of the appellant.

Time Limit for Filing Refund Claim:
The refund claim of &8377;21,451/- was initially rejected as time-barred. However, the Tribunal, referencing the Raymond Ltd. case, clarified that the time limit under Section 11B was applicable. Since the appellant filed the refund claim within the prescribed time limit, the Tribunal deemed the claim timely. Consequently, the impugned order was set aside, and the appeal was allowed with consequential relief. The Tribunal's decision favored the appellant on both issues, establishing their entitlement to the refund and the timely filing of the claim.

This judgment highlights the importance of understanding legislative intent in tax matters and adhering to prescribed time limits for refund claims under relevant statutes. The case law cited provides valuable precedent for interpreting refund provisions and ensuring taxpayers' rights are upheld within the legal framework.