2024 (12) TMI 1138 - AT - Service Tax

Application for refund against export of output services namely Information Technology from September 2008 to March 2009 rejected - non-registration of premises - HELD THAT - After the decision of SPAN INFOTECH (INDIA) PVT LTD P LTD 2018 (2) TMI 946 - CESTAT BANGALORE , statute has been necessarily amended to incorporate provision to the effect that computation of limitation period to grant refund would start from the date of receipt of foreign exchange by the exporter, apart from the fact that section 35A(4) of the Central Excise Act 1944 which is equally applicable to Service Tax matters in view of operation of section 73(5) of the Finance Act 1994, the Commissioner (Appeals) is required to pass his/her order disposing of the appeal in writing by stating the points for determination, the decision thereon and the reasons for such decision, which is admittedly not done in respect of all issues raised before him while disposing of the appeal . The matter requires a de novo hearing by the Commissioner (Appeals) for which this appeal is required to be remanded back to him for de novo hearing and for giving his finding in accordance with section 35A (4) of the Excise Act, equally applicable to Service Tax matters, while disposing of the appeal - the appeal is allowed by way of remand.

Summary

Issues:
Refund of export of output services, rejection of refund applications, non-registration of premises, overlapping refund applications, computation of limitation period, reliance on judicial decisions, admissibility of cenvat credit on unregistered premises, requirement for de novo hearing by Commissioner (Appeals).

Analysis:
The appellant sought a refund for export of Information Technology services from September 2008 to March 2009 through three applications, which were rejected due to various reasons. The rejection was based on the grounds of unregistered premises, claims made after the limitation period, and overlapping refund applications. The Commissioner (Appeals) focused only on the non-registration of premises, citing the mPortal judgment by the Karnataka High Court, which stated that registration of all premises providing output services is not mandatory. The appellant argued that the rejection was not justified, especially in light of the SPAN INFOTECH judgment by CESTAT Bangalore, which clarified the computation of the limitation period for refunds based on the date of FIRC issuance.

The Authorized Representative opposed the appeal, supporting the Commissioner (Appeals)'s decision based on the Sutham Nylocots judgment by the Madras High Court, which emphasized the need for registration before claiming a refund. The Commissioner (Appeals) rejected the refund claim primarily due to the unregistered premises, stating that other grounds for rejection were unnecessary to address. However, the appellant disagreed, highlighting the distinction between the issues in the mPortal and Sutham Nylocots judgments, emphasizing the admissibility of cenvat credit on unregistered premises and the amendment in the statute for computing the limitation period for refunds.

The Tribunal found the Commissioner (Appeals)'s reasoning inadequate, noting the need for a de novo hearing considering the legal developments and the failure to address all issues raised in the appeal. The matter was remanded back to the Commissioner (Appeals) for a fresh hearing, emphasizing compliance with section 35A(4) of the Excise Act, applicable to Service Tax matters. The Tribunal directed the Commissioner (Appeals) to expedite the disposal of the case within four months from the date of the order, ensuring notice to all parties involved. Ultimately, the appeal was allowed by way of remand, setting aside the earlier order of the Commissioner (Appeals).