2024 (7) TMI 756 - AT - Service Tax

Rebate/refund claims - rejection on the ground of limitation in terms of Section 11B - whether the provisions of Section 11B of the Act are applicable and if so, the claim for rebate made by the appellant is time barred? - HELD THAT - As per the provisions of Section 83 of the Finance Act, various provisions of the Central Excise Act are made applicable to the service tax provisions and Section 11B is also included in the list of sections. Thus, there is no doubt that the provisions of Section 11B are applicable in so far as the provisions of the Act are concerned. However, the contention of the appellant is that their claim is not for refund, but a case of rebate in respect of the exports made and the provisions of Section 11B does not deal with it. In this regard, the Commissioner in the impugned order had relied on the provisions of Explanation A to Section 11B, which the appellant has completely ignored while making the submissions - the appellant exported services with payment of service tax and filed applications for claiming a rebate of service tax paid as per Rule 5 of the Rules, 2005. Hence the contention that what is being claimed is not tax but was only a deposit is unsustainable. The appellant though had an option to export without payment of service tax, however, under the self-assessment, had chosen to assess and deposit the service tax at the time of export of service - the provisions of Section 73A of the Act provides for such contingency that, where any person has collected any amount, which is not required to be collected from any other person, in any manner, as representing service tax, such person shall forthwith pay the amount so collected to the credit of the Central Government . Thus, no error can be attributed to the Department. In so far as the claim for the period April, 2007 to September, 2007, being within the time limit of one year as the rebate claim was filed on 30.06.2008, the Authorities below rejected the same as the appellant failed to produce the relevant documents, i.e. export invoices, FIRGs, service agreement between them and their foreign clients and also the declaration under para 3(ii)(b) of the Notification - it would be appropriate to grant an opportunity to the appellant to place on record the requisite documents in terms of the notification and the claim may then be considered by the Authorities in accordance with law. The impugned order is modified to the extent that the rebate claim for the period April, 2007 to September, 2007 may be re-considered on the basis of the documents to be submitted by the appellant. The rejection of the rebate claim as being time barred is upheld - Appeal allowed in part.

Summary

Issues:
- Rejection of rebate/refund claims on the ground of limitation and insufficient documents.
- Applicability of Section 11B of the Finance Act, 1994 to rebate claims.
- Whether the rebate claims were time-barred.
- Authority of the Department to collect tax on export of services.
- Rejection of rebate claim for the period April 2007 to September 2007 due to lack of documents.

Analysis:
The appellant challenged the rejection of rebate/refund claims due to limitation and insufficient documents by lower authorities. The appellant provided "Business Auxiliary Service" and "Consulting Engineer's Service" to group companies outside India, filing refund claims under Export of Service Rules, 2005. The Adjudicating Authority and the appeal dismissed the claims, leading to the present appeal before the Tribunal. The appellant argued that services were considered export services, citing a previous Tribunal decision. They contended that Section 11B did not apply as the amount paid was a deposit, not tax. However, the Tribunal found Section 11B applicable to service tax matters, including rebate claims.

Regarding the time-barred claims, the Tribunal noted the filing dates exceeding the one-year limit, leading to rightful rejection. The appellant's argument that the amount collected was a deposit, not tax, was refuted based on their own statement confirming payment of service tax and rebate claims. The Tribunal upheld the rejection of time-barred claims. The Department's authority to collect tax on exported services was affirmed, as the appellant chose to pay service tax at export, making the contention unsustainable.

For the claim from April 2007 to September 2007, within the time limit, rejection was based on missing documents. The Tribunal modified the order, allowing reconsideration upon submission of required documents. The impugned order was partially allowed, upholding rejection of time-barred claims but granting an opportunity to re-evaluate the claim for April-September 2007 with proper documentation.