In a recent case, the Kolkata bench of the Customs, Excise And Service Tax Appellate Tribunal ( CESTAT ) held the assessee eligible for the refund of Service Tax which was rejected on the ground of limitation. The government extended the time limit to file refund claims of service tax on exported goods. It was viewed that the beneficial notification can be applied retrospectively to allow the refund applications filed within six months from the quarter ending.

Shri Kishor K. Acharya and Shri N.K. Dash appeared for the Appellant. Shri S. Mukhopadhyay, Authorized Representative  appeared for the Respondent

 M/s. Essel Mining & Industries Limited. the Appellant is an exporter of Iron Ore and recipient of Port services. Notification No. 41/2007-ST dated 06.10.2007 exempts the service tax leviable on taxable services namely, port services provided for export of goods. The said exemption is to be claimed by an exporter by way of refund as covered under the aforesaid Notification No. 41/2007.

The appellant applied for a refund of Rs.94,56,051/-, which was later revised to Rs.96,63,788/-, being the service tax paid by them, pertaining to the exports made on different dates during the quarter January 2008 to March 2008. Out of the said Rs.96,63,788/-, the jurisdictional Deputy Commissioner vide Order-in-Original No.R-125/RKLII/2010 dated 19.11.2010 allowed a refund of Rs.81,00,855/- and rejected the remaining amount of Rs.15,62,933/-.  While rejecting part of the refund claim, the ld. adjudicating authority observed that in respect of many shipping bills, the exports had been made prior to December 2007 but the invoices had been received during the quarter January 2008 to March 2008.

The adjudicating authority considered that in respect of those shipping bills where the exports had been made prior to December 2007, the refund claim filed during the quarter January 2008 to March 2008 was barred by limitation. Out of the rejected refund, an amount of Rs.12,14,012/- was rejected on the ground of limitation and Rs.2,81,468/- was rejected because the same pertains to service tax paid in respect of Education Cess and Secondary & Higher Education Cess. It was observed that as per Notification No.41/2007, the refund applications for any quarter have to be filed within 60 days from the end of the relevant quarter in which the corresponding exports have been made. 

It was submitted that the receipt of the relevant services, payment of service tax thereon by the appellant and usage of said services to export goods are not in dispute. Hence, the rejection of the refund claim on non-fulfilment of procedural conditions in the said Notification No.41/2007 is contrary to the letters and spirit of the said Notification. The Appellant submitted that the condition in clause (c) prescribed in Notification No.41/2007 mandates a refund of service tax paid on the specified services. The condition in clause (e) thereof requiring the exporter to file the refund claim every quarter within 60 days from the end of the relevant quarter is only a mechanism to claim the refund.

A two-member bench of Shri Ashok Jindal, Member ( Judicial ) and Shri K Anpazhakan, Member ( Technical )  observed that the Government has realized the difficulty of the exporters and issued Notification No.32/2008-ST dated 18.11.2008 extending the period for filing the refund claim from “60 days” to “six months”.  It was viewed that this beneficial notification can be applied retrospectively to allow the refund applications filed within six months from the quarter ending.

The CESTAT held that the Appellant is eligible for a refund of Rs.12,14,012/- which was rejected on the grounds of limitation.