By TIOL News Service

MUMBAI, NOV 18, 2015: THE appellant paid service tax on the services exported under the category of "Business Auxiliary Services" and "Business Support Services" to an entity in Germany and Yugoslavia.

Later, they filed a claim for refund of Rs.73,03,154/- on 04.01.2011 in terms of notification No.11/2005-ST dated 19th April 2005.

The AC sanctioned the rebate of Rs.49,73,683/- and rejected the rebate claim of Rs.23,29,471/- on the ground that the rebate claim is hit by limitation as consideration for this bill was received by the appellant by a FIRC dated 18.12.2009 and the refund claim should have been filed before 18.12.2010 while the refund claim was filed with the department on 04.01.2011.

As the lower appellate authority upheld the order-in-original, the appellant is before the CESTAT.

It is the case of the appellant that the services were exported in December 2009 for which appellant is required to discharge the service tax liability in the subsequent month before 5th January 2010 and they have discharged the service tax liability on 05.01.2010 and filed a refund claim on 04.01.2011 which is within one year.

The AR justified the denial of the refund claim by placing reliance on the Tribunal decision in Bechtel India Pvt. Ltd. - 2013-TIOL-1977-CESTAT-DEL.

The Bench adverted to the notification 11/2005-ST and remarked that the findings of the lower authorities as well as the arguments of the AR were untenable because -

++ the conditions and limitations for granting the refund of the service tax paid on services exported are that the taxable service should have been exported and the payment for such services should have been received in convertible foreign exchange; that the service tax and cess have been paid on taxable service exported.

++ there is no dispute as to the fact that services have been exported and the payment has been received in a convertible foreign exchange. It is also undisputed that the amount of service tax liability on the services exported are to be paid on or before 5th January 2010 for the services exported in the month of December 2009 and such tax liability is paid by the appellant. The relevant date for refund in the case of rebate should be, in our view from the date of payment of service tax on the taxable services exported.

Observing that the decision in Vodafone Cellular Ltd. - 2014-TIOL-319-CESTAT-MUM involving a similar issue supports the view of the appellant, the Bench held that the impugned order which upheld the rejection of refund claim of Rs.23,29,471/- is incorrect.

The appeal was allowed with consequential relief.

(See 2015-TIOL-2442-CESTAT-MUM)