By TIOL News Service

NEW DELHI, NOV 06, 2015: IN an appeal filed by the appellant, the CESTAT - 2014-TIOL-2432-CESTAT-DEL held as under -

"ST - Rebate - Rule 5 of Export of Services Rules, 2005 - Notification 11/2005-ST - A transaction of service export is to be treated as complete only when the service has been provided and payment for the same has been received in convertible foreign exchange - provisions of section 11B of CEA, 1944 would be applicable to rebate of service tax in respect of services exported - rebate claims filed after expiry of one year from the date of receiving payments have to be treated as time barred and as such, the orders rejecting the appeals on the ground of limitation have to be upheld: CESTAT [para 7, 8, 9]"

Against this order, the appellant is before the Delhi High Court.

It is submitted that the services rendered viz., 'Business Auxiliary Services' were provided to recipients outside India and, therefore, they were exempt from service tax liability by the Export of Services Rules, 2005 read with CBEC Circular No.111/05/2009-ST dated 24th February 2009 and Government of India Notification 06/2010-ST dated 27th February 2010.

The High Court observed -

++ The question of applicability of Section 11B of the CE Act read with Section 83 of the Finance Act, 1994 to the refund application of the Appellant would arise only if the CESTAT came to the conclusion that the services rendered by the Appellant were in fact liable to service tax.

++ If, on the other hand, the CESTAT finds that the services rendered by the Appellant were not amenable to service tax at all, the question of processing the refund application of the Appellant with reference to Section 11B of the Act would not arise. [Hind   Agro Industries Limited v. Commissioner of Customs - 2007-TIOL-811-HC-DEL-CUS, Mafatlal Industries v. Union of India - 2002-TIOL-54-SC-CX-CB refers]

++ The Court is of the view that the CESTAT ought to have first satisfied itself that the services rendered by the Appellant was, on facts, amenable to service tax and different from the other three appeals which were heard together with the Appellant's appeal and allowed by the same impugned order. If and only if the CESTAT finds that the services rendered by the Appellant were in fact amenable to service tax would it then take up the question whether in terms of Section 11B of the Central Excise Act, 1944 and the claim of the refund was barred by limitation.

The order was set aside and the appeal was restored to the file of the CESTAT for a decision afresh.

(See 2015-TIOL-2549-HC-DEL-ST)