2017 (7) TMI 903 - AT - Service Tax

Tribunal allows appeal on time-barred refund claim under Notification No.41/2007-ST

The Tribunal allowed the appeal, setting aside the Adjudicating Authority's decision to reject a refund claim as time-barred under Notification ... Refund claim - services used for export of goods - rejection on the ground that the demand is time barred under the N/N. 41/2007-ST dt.06.10.2007 - Held that: - N/N. 41/2007-ST prescribed limitation of 60 days from the end of quarter which was amended by N/N. 32/2008-ST dated 18.11.2008 and extended the period of limitation to six months from the end of the quarter - In the present case, the respondent filed a refund claim on 03.07.2008 for the quarter ending on March, 2008. According to the Revenue, the time period of 60 days would be applicable - by Circular dated 12.03.2009 the refund claim for quarter ending March, 2008 filed under N/N. 41/2007-ST as amended by N/N. 32/2008, the limitation would be six months and effective retrospectively - appeal dismissed - decided against Revenue. Issues:1. Time limitation for filing a refund claim under Notification No.41/2007-ST.2. Retroactive application of Amendment Notification No.32/2008.3. Binding nature of Board's Circular on the Revenue.4. Interpretation of exemption notifications and circulars.5. Precedents and judgments supporting the respondent's position.Issue 1: Time limitation for filing a refund claim under Notification No.41/2007-ST:The case involved a refund claim of service tax paid on services used for exported goods. The Adjudicating Authority rejected the claim as time-barred under Notification No.41/2007-ST. However, the Commr. (Appeals) set aside the decision, allowing the appeal to be considered on merit. The respondent filed the claim within six months from the end of the quarter, relying on Amendment Notification No.32/2008, which extended the time limit. The Tribunal supported this view based on the retrospective application of the amendment.Issue 2: Retroactive application of Amendment Notification No.32/2008:The Revenue argued that the amendment should apply prospectively, as there was no express provision for retrospective effect. However, the Commr. (Appeals) and the Tribunal, following the Board's Circular, held that the amendment had retrospective effect. The Tribunal cited various case laws and judgments supporting this interpretation, emphasizing the binding nature of the Circular on the Revenue.Issue 3: Binding nature of Board's Circular on the Revenue:The Tribunal highlighted the Supreme Court's rulings emphasizing the binding nature of Circulars issued by the Board on the Department. It was established that the Department must act consistently with the Circular in force at the relevant time. The Tribunal agreed with the respondent's advocate that the Circular dated 12.03.2009 was binding on the Revenue, supporting the decision to consider the refund claim on merit.Issue 4: Interpretation of exemption notifications and circulars:The Tribunal referred to precedents and judgments, including the case of CCE Vs. Essar Steel Ltd., to support the interpretation of exemption notifications and circulars. It was emphasized that circulars issued by the Board with a different interpretation would be binding on the Revenue. The Tribunal analyzed the scope of notifications and the impact of circulars on extending benefits retrospectively, concluding that the Circular in question enlarged the scope of the notification.Issue 5: Precedents and judgments supporting the respondent's position:The Tribunal cited several case laws, such as Moenus Textile Pvt. Ltd. Vs. CCE and Jindal Stainless Ltd. Vs. CCE, to support the respondent's position. The Tribunal also referred to the decision in the case of CCE Vs. Essar Steel Ltd., where the Tribunal dismissed the Revenue's appeal on a similar issue. The Tribunal upheld the decision of the Commr. (Appeals) and directed the Adjudicating Authority to decide the refund claim on merit, ultimately dismissing the Revenue's appeal.Overall, the judgment focused on the interpretation of time limitations for refund claims, the retrospective application of amendments, the binding nature of Circulars, and the impact of precedents on decision-making in tax matters.