Refund limitation cannot defeat a statutory rebate where the parent scheme does not clearly authorise the restriction.

A revised refund claim for tax paid on specified export-related services was held not to be barred by limitation under paragraph 3(g) of Notification No. 41/2012-ST. The Tribunal applied its earlier view that a limitation condition in subordinate legislation cannot be used to defeat a substantive rebate or refund benefit where the parent enactment does not clearly authorise such a restriction. On that basis, rejection of the refund as time-barred was held unsustainable and the claim was allowed in favour of the assessee.

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Issues: Whether the revised claim for refund was hit by limitation under paragraph 3(g) of Notification No. 41/2012-ST dated 29.06.2012.

Analysis: The dispute concerned rejection of a portion of the refund claim as time-barred for the period 01.04.2016 to 22.08.2016. The Tribunal followed its earlier view that a limitation period for refund of tax paid on specified export-related services cannot be introduced so as to defeat the substantive rebate benefit where the parent enactment does not clearly impose such a restriction. On the facts, the denial of refund on limitation was found inconsistent with the legal position applied to similar refund claims.

Conclusion: The revised refund claim was not hit by limitation and the rejection on that ground was unsustainable, in favour of the assessee.

Ratio Decidendi: A limitation period affecting a statutory refund or rebate benefit cannot be enforced through subordinate legislation in a manner that defeats the parent scheme unless the enabling enactment clearly authorises such restriction.

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