2017 (9) TMI 707 - AT - Service Tax

Refund claim - export of services - denial of refund on the ground that the appellants failed to produce supporting agreements to ascertain the classification of service and accordingly the benefit of refund of service tax on services exported cannot be granted in terms of N/N. 11/2005-ST dated 19/04/2005 - time limitation - scope of Section 11B - whether the payments made by the appellants are to be treated within the scope of the Finance Act, 1994 to which limitation as prescribed u/s 11B of CEA, 1944 has been made applicable? - Held that - the appellants rendered taxable service and their claim for rebate of such tax paid, is governed by the provision of Finance Act, 1994, Export of Service Rules, 2005 and accordingly, the provisions of Section 11B of Central Excise Act in so far as limitation is concerned, will be rightly applicable to the appellants. The tax is paid on taxable services. The Government has provided certain concession when the services were exported out of country. Such concession is subjected to various conditions and limitations. On fulfillment of such condition, the appellants shall be entitled for the rebate. Time limit u/s 11B - Held that - The appellants did render service which are liable to service tax. The claim for rebate has to be within the ambit of the provision of Section 11B of Central Excise Act, 1944 made applicable to the service tax collected in terms of Finance Act, 1994. The present appellants claim for rebate is barred by limitation - appeal dismissed - decided against appellant.

Summary

Issues Involved:
1. Eligibility for refund of service tax under the Finance Act, 1994.
2. Applicability of Section 11B of the Central Excise Act, 1944 to the refund claims.
3. Classification of services as "export of services."
4. Adherence to the limitation period for filing rebate claims.

Issue-wise Detailed Analysis:

1. Eligibility for Refund of Service Tax under the Finance Act, 1994:
The appellants provided taxable services to foreign clients and paid service tax on these transactions. They filed rebate claims under Rule 5 of the Export of Service Rules, 2005, and Notification 11/2005-ST dated 19/04/2005, asserting that their services should be considered as "export of services." The Original Authority rejected these claims due to the lack of supporting agreements to classify the services. The Tribunal, however, noted that the appellants' services were recorded as "business auxiliary services" in their ST-3 returns and held that the department could not question the classification at the rebate claim stage.

2. Applicability of Section 11B of the Central Excise Act, 1944 to the Refund Claims:
The Tribunal confirmed that the provisions of Section 11B, which include a limitation period for filing refund claims, apply to service tax matters by virtue of Section 83 of the Finance Act, 1994. The Tribunal emphasized that the "relevant date" for counting the limitation period in the case of service export is the date on which the payment for the service is received.

3. Classification of Services as "Export of Services":
The Tribunal acknowledged that the appellants provided "business auxiliary services" to foreign clients, which were eligible for rebate under Rule 3(1)(iii) read with Rule 3(2) of the Export of Service Rules, 2005. The Tribunal found that the appellants had received payment in convertible foreign exchange, thus satisfying the conditions for export of services.

4. Adherence to the Limitation Period for Filing Rebate Claims:
The Tribunal noted that two of the rebate claims were filed beyond the one-year limitation period from the date of receiving payments, as prescribed under Section 11B. Consequently, these claims were deemed time-barred. The Tribunal upheld the rejection of these claims on the grounds of limitation, distinguishing them from other claims that were filed within the permissible period.

Conclusion:
The Tribunal concluded that the appellants' claims for rebate of service tax paid on exported services were governed by the provisions of the Finance Act, 1994, and the Export of Service Rules, 2005. The Tribunal affirmed that the limitation period under Section 11B of the Central Excise Act, 1944, applied to these claims. As the appellants did not adhere to the limitation period for two of the claims, those claims were dismissed as time-barred. The appeals were accordingly dismissed.