2018 (6) TMI 440 - AT - Service Tax

Refund on unutilized CENVAT credit - denial on the ground that the refund claim is hit by limitation - Rule 5 of the CCR 2004 read with N/N. 27/2012-CE (NT) dt. 18.06.2012 - Whether the rejection of refund claim on the ground of limitation is legal and proper? - Held that - Circular dt. 26.10.2016 clarifies that in the case of export of services - When the relevant date is reckoned as the date of receipt of foreign currency, the refund claims are well within time - rejection of refund on the ground of time bar is unjustified - appeal allowed - decided in favor of appellant.

Summary

Issues: Refund claim rejection on the ground of limitation.

Analysis:
The case involved the appellants providing back office and designing services related to software development to foreign group companies, filing refund claims under Rule 5 of the CCR 2004. The original authority partially granted the refund but rejected certain amounts citing limitation issues. The rejection also extended to the refund claim for parking service. The appellant challenged this decision through the present appeal.

During the proceedings, the appellant's consultant argued that the authorities miscalculated the one-year period by considering the invoice date instead of the date of receipt of foreign currency. Referring to a Chief Commissioner's circular, it was highlighted that decisions in various cases had been accepted by the department, setting the relevant date for the one-year period as the date of foreign remittances.

On the other hand, the respondent's representative reiterated the findings of the impugned order without presenting any new arguments. After hearing both sides, the main issue under consideration was whether the rejection of the refund claim based on limitation was lawful. The consultant contended that by considering the date of foreign currency receipt, the refund claims were within the time limit. The tribunal, referring to the Chief Commissioner's circular, agreed that the rejection on the grounds of being time-barred was unjustified and needed to be overturned. Consequently, the appeal was allowed with appropriate relief as per the law, as no other issues were raised during the proceedings.