2017 (2) TMI 1076 - AT - Service Tax

Refund claim - rejection on the ground of time limitation as well as the period involved in this case is prior to the issuance of notification - N/N. 11/2007-ST - Held that - in the refund claims, appellant had not mentioned anything about claiming exemption under N/N. 11/2007-ST. We find that first appellate authority has erroneously recorded the findings on the extending benefit of notification. Provisions of Section 11B Clause (B) (ec) cannot be applied in this case as Section 11B has to be read holistically; which would mean that every refund claim filed has to be considered in terms of provisions and this refund claims of appellant being not in dispute before any higher judicial authority, Section 11B Clause (B) (ec) will not get attracted - refund claims are time barred. Appeal rejected - decided against appellant.

Summary

Issues:
1. Refund claim filed beyond the period of one year from the date of payment.
2. Exemption for tax on clinical trials granted under notification No.11/2007-ST not applicable for the period in question.

Analysis:
Issue 1: The appellant filed a refund claim for service tax paid on services related to clinical trials conducted between May 2006 to February 2007. The claim was rejected by the first appellate authority on the grounds that it was filed beyond the one-year period from the date of payment. The appellant argued that the limitation period did not apply as the refund was filed under Section 11B, Clause (B) (ec) of the Central Excise Act, 1944. They contended that the claim was filed within one year from the date of the CESTAT order. However, the Tribunal found that the provisions of Section 11B Clause (B) (ec) could not be applied in this case as every refund claim must be considered in terms of the provisions, and since the refund claims were not disputed before any higher judicial authority, the specific clause would not be applicable. The Tribunal upheld the lower authorities' findings on the time-barred nature of the refund claims.

Issue 2: The appellant also challenged the rejection of the refund claim on the basis that the exemption for tax on clinical trials under notification No.11/2007-ST was not applicable for the period in question. The Tribunal noted that the appellant had not claimed the exemption under this notification in their refund claims. Upon reviewing the records, it was found that the first appellate authority had erroneously focused on the issue of extending the benefit of the notification, which was deemed irrelevant to the case at hand. The Tribunal ruled that the findings regarding the exemption notification were extraneous to the main issue and therefore struck down those findings. Ultimately, the Tribunal concluded that the appeal lacked merit, affirming the correctness and legality of the impugned order, and dismissed the appeal.

In summary, the Tribunal upheld the rejection of the appellant's refund claim on the grounds of being time-barred and clarified that the exemption notification for tax on clinical trials was not applicable in this case as the appellant had not claimed it in their refund application. The Tribunal emphasized the holistic reading of Section 11B and the need to consider each refund claim on its own merits, leading to the dismissal of the appeal.