Prospective operation of substituted fiscal benefit limits refund rate to the notification's effective date.

A substituted fiscal exemption or refund rate operates prospectively unless the later notification expressly gives retrospective effect. Here, the enhanced service tax refund rate for commission agent services under Notification No. 33/2008-ST applied only from 07.12.2008, because the earlier notification already governed the preceding period and the later notification did not state that the 10% rate would relate back. The cited Supreme Court ruling on substitution was distinguished on that basis, and the circular did not support retrospective application. The refund was therefore correctly restricted to 2% up to 06.12.2008 and 10% thereafter.

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Issues: Whether the assessee was entitled to claim refund of service tax paid on commission agent services at 10% of FOB value for the entire period October to December 2008, or whether refund was correctly restricted to 2% up to 06.12.2008 and 10% only thereafter.

Analysis: Notification No. 33/2008-ST did not state that the substituted rate of 10% would operate retrospectively from the date of Notification No. 41/2007-ST. The benefit claimed related to exports made before the later notification came into force, and the earlier notification had already governed the relevant period. The cited Supreme Court decision on substitution was distinguished because, in the present case, the earlier benefit was already available and the later benefit was granted from the date it became effective. The circular also did not support retrospective application of the substituted rate.

Conclusion: The assessee was not entitled to refund at 10% for the entire period; the Revenue was correct in restricting the enhanced benefit to the period after 07.12.2008.

Final Conclusion: The appeal failed and the order restricting refund on the basis of the effective dates of the notifications was upheld.

Ratio Decidendi: A substituted fiscal benefit operates prospectively unless the notification expressly provides retrospective effect.

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