By TIOL News Service

MUMBAI, FEB 28, 2014: REFUND claims amounting to Rs.11,32,86,358/- were filed by the appellant pertaining to the period April 2007 to December 2010. The appellant filed rebate claims in terms of Notification No. 11/2005-ST in respect of services provided in India to international inbound roamers registered with the Foreign Telecom Network Operator but located in India at the time of providing of such services treating the supply of services as export of services under Export of Services Rules, 2005. The original authority rejected the refund claims on the ground that 7 of these claimswere time-barred inasmuch as the claim has been filed after a lapse of more than one year. The claim was also rejected on the ground that the services rendered by the appellant to international roamers were not export of services. Another ground taken for rejection was that of unjust enrichment.

Aggrieved by these orders, the appellant filed an appeal before the lower appellate authority who has also upheld the order of the adjudicating authority.

And so, the appellant is before the CESTAT and submits -

++ The Tribunal had videfinal Order No. A/503-508/13/CSTB/C-I dated 12/03/2013 (2013-TIOL-566-CESTAT-MUM) held that the services provided to customers of the Foreign Telecom Service Provider as international inbound roamers while they are in India using appellant's telecom network is 'export of service' as the service is rendered to the foreign telecom service provider who is located outside India and, therefore, the same amounts to export of service under the Export of Service Rules, 2005. While coming to the said conclusion, reliance was also placed on the decision of this Tribunal in the case of Paul Merchants Limited vs. Commissioner of Central Excise (2012-TIOL-1877-CESTAT-DEL).

++ As regards the argument of unjust enrichment, the transaction is one of export and, therefore, the principles of unjust enrichment would not apply to export transactions as provided for in clause (a) to proviso to sub-section(2) of Section 11B.

++ Notification 11/2005-ST does not prescribe any time-limit for presenting the export rebate claims and, therefore, the claims cannot be rejected on account of time-bar. Reliance is placed on the decisions in Dorcas Market Makers Pvt. Ltd. (2012-TIOL-108-HC-MAD-CX) & Swagat Synthetics (2008-TIOL-666-HC-AHM-CX).

Inasmuch as it is prayed that the appeal be allowed.

The Revenue representative submitted that the decision in the case of P aul Merchants Ltd. (supra) has been challenged before the Punjab and Haryana High Court and the appeal has been admitted. Similarly, in respect of the order passed by the Tribunal in the appellant's own case, Revenue has challenged the same before the Bombay High Court and hence these decisions are in jeopardy. That since the provisions of section 11B have been made applicable to Service Tax matters vide section 83 of FA, 1994, the time-limit of one year is applicable although not specified in the notification 11/2005-ST. The decisions in Doaba Co-operative Sugar Mills (2002-TIOL-426-SC-CX) and Everest Flavours Ltd. (2012-TIOL-285-HC-MUM-CX) is relied in support.

The Bench observed that on merits the appellant has a case for refund of service tax paid on input services in view of the favourabledecisions in Paul Merchants Ltd. & appellant's own case and although challenged by Revenue no stay has been obtained; that since the transaction is one of export, the principles of unjust enrichment would not be applicable.

Nonetheless, the CESTAT observed that as regards the 'time-bar' issue, the Revenue contention has merits.

The Bench held -

"5.3 … We notice that the provisions of Section 11B of the Central Excise Act, 1944, which deals with refund of excise duties has been made applicable to service tax vide Section 83 of the Finance Act,1994. This would imply that the time-limit of one year from the date of payment of tax for filing of the refund claim would apply in respect of service tax refunds also. Even if it is argued that there is no specific time-limit set out in Notification 11/2005-ST, it is a settled position in law that though the law is silent on the time-limit applicable, a reasonable time-limit has to be read into the law. The decision of the hon'ble apex Court in the case of Citadel Fine Pharmaceuticals and the hon'ble Bombay High Court in the case of Everest Flavours Ltd. and other decisions of the hon'ble apex Court relied upon by the Revenue would support this contention. Therefore, seven refund claims covered by the Order-in-Appeal dated 24/06/2011 appears to attract time-bar and only two claims covered by Order-in-Appeal dated 24/10/2011 and 17/04/2012 is not hit by the time-bar aspect…."

The appeals were disposed of in above terms.

(See 2014-TIOL-319-CESTAT-MUM)