2016 (4) TMI 112 - AT - Service Tax

Application of time-limit of Section 11B of Service Tax Act, 1994 - Rejection of refund claim for Service tax availed on input services which were procured for rendering output services which were exported without payment of Service tax - Held that - the first appellate authority has correctly applied the law by relying the decisions of higher judicial forum. Therefore, the impugned order is correct, legal and does not suffer from any infirmity as the refund claim is not hit by time bar and appellant is eligible for refund. - Decided against the revenue

Summary

Issues:
1. Refund claim rejection based on limitation period under Section 11B of the Central Excise Act, 1944.
2. Rejection of refund claim due to failure to prove utilization of input services in providing exported output services.

Analysis:

*Issue 1: Refund claim rejection based on limitation period under Section 11B*

The case involved appeals against the rejection of refund claims for Service Tax availed on input services used for exported output services, which were rejected as filed beyond the one-year period stipulated under Section 11B of the Central Excise Act, 1944. The lower authorities considered the relevant date for filing the refund claims as the date of export of services. The first appellate authority reversed the rejection, allowing the claims by interpreting the relevant date as one year from the end of the respective quarters, in line with CBEC Circular No. 112/6/2009-S.T. and other judicial precedents. The appellate authority held that the claims were timely filed within the prescribed period and not time-barred, as clarified by the circular and supported by legal interpretations from various judgments.

*Issue 2: Rejection of refund claim due to failure to prove utilization of input services*

The second ground for rejection was the failure to prove the utilization of various input services in providing the exported output services. The appellant contended that the input services, such as Tour Operators Service, Air Travel Agency Service, food coupons, Courier Service, Rent-a-cab service, party bill (DJs), cleaning, etc., were indeed used in providing the taxable services exported and were essential for their business operations. The first appellate authority, relying on higher judicial forums' decisions, found that the appellant had adequately demonstrated the correlation of input services with the output services exported. Therefore, the rejection on this ground was unfounded, and the appellant was deemed eligible for the refund.

In conclusion, the appellate tribunal upheld the first appellate authority's decision, finding it legally sound and free from any defects. The impugned order was upheld, and the appeal was rejected, confirming the eligibility of the appellant for the refund claims.