2015 (12) TMI 153 - AT - Service Tax

Rejection of refund claim - Bar of limitation - Notification No. 17/2011-ST dtd 1.3.2011 - Power of Commissioner to remand back the case - Held that - Such powers has been granted to the adjudicating authorities/revenue officers needs to be used in broader prospective. In the case in hand, since the issue is of refund of the service tax paid and services received in SEZ area, the said powers which are given to the adjudicating authority should be exercised to achieve stated goals of Govt. of India i.e., to make services to SEZ tax free. - in the peculiar facts of this case to the extent the appeal is filed of rejection of refund claim of ₹ 85,237/- is remanded back to the adjudicating authority to reconsider the issue after following the principle of natural justice and considering the clause 3(e) of the Notification No. 17/2011-ST in its proper perspective. - Decided in favour of assessee.

Summary

Issues: Rejection of refund claim under Notification No. 17/2011-ST on the ground of limitations.

Analysis:
The judgment deals with an appeal against the rejection of a refund claim amounting to Rs. 89,000 based on the limitations specified in Notification No. 17/2011-ST. The appellate authority, after hearing both parties and examining the records, observed that the issue pertained to the Asstt. Commissioner of Central Excise's power to condone or extend the period for filing refund claims under the said Notification. It was noted that the lower authorities had rejected part of the refund claim on the grounds of limitations. The appellate authority emphasized that the powers granted to adjudicating authorities should be utilized in a broader perspective. Specifically, in cases involving refund of service tax paid for services received in SEZ areas, these powers should be exercised to align with the government's objective of making services to SEZs tax-free.

The judgment highlighted the importance of interpreting Clause 3(e) of Notification No. 17/2011-ST in a manner that facilitates the realization of the government's policy goals. Consequently, the appellate authority remanded the appeal back to the adjudicating authority for reconsideration. The adjudicating authority was instructed to review the issue while adhering to the principles of natural justice and taking into account the provisions of Clause 3(e) of the said Notification. Ultimately, the appeal was allowed by way of remand, emphasizing the need for a comprehensive reevaluation of the refund claim in light of the broader objectives of the government's taxation policies.