Limitation for service tax refund begins when refund right crystallizes on tax payment, not from export quarter end.

Refund claims under the service tax exemption notifications were held to be timely because the limitation period began only when the right to refund crystallized on payment of service tax on commission agent services used for exports. The tribunal rejected computation of limitation from the end of the export quarter, since refund could not be claimed before tax payment and the claim became enforceable only thereafter. On that basis, the claims filed within six months of tax payment were within time, and rejection on limitation was unsustainable.

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Issues: Whether the refund claims under the service tax exemption notifications were barred by limitation on the ground that they were filed beyond six months from the end of the quarter of export, or whether the period of limitation commenced only when the service tax on commission was actually paid.

Analysis: The refund claims related to commission agent service used for export of goods under the relevant exemption notifications. The claims were filed within six months from the date on which service tax on the commission was paid. Since the refund could not be claimed before tax payment, the right to refund crystallized only on payment of service tax, and limitation could not be computed from an earlier export quarter. The tribunal followed the settled view that the limitation period starts only when the refund claim becomes enforceable.

Conclusion: The refund claims were within time and the rejection on limitation was unsustainable.

Ratio Decidendi: Limitation for a refund claim begins only when the right to claim refund crystallizes, and not from an earlier date when the underlying export transaction took place.

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