In a significant ruling, the Mumbai bench of the Customs Excise and Service Tax Appellate Tribunal (CESTAT) has dismissed an appeal for refund claims on freight, banking, and financial services, as the claims were filed beyond the statutory time limit and were thus barred by Section 11B of the Central Excise Act, 1944.
The appellants, Rosa Impex Private Limited submitted four refund claims for service tax paid on input services used for exporting goods between April 2013 and January 2014, totaling Rs. 30,23,843/-. These claims were filed under Notification No. 41/2012-Service Tax dated 29.06.2012, and pertained to services such as postage, freight, and banking services utilized in exporting medicines. Upon review, the Deputy Commissioner (CRS), GST & Central Excise, Thane, found that all four claims were time-barred, having been filed beyond the one-year limitation period stipulated by law. Consequently, the refund claims were rejected without examining their merits through an Order-in-Original issued on 10.08.2018.
Dissatisfied with the rejection, the appellants appealed to the Commissioner (Appeals), Thane. The Commissioner partially allowed the refund claim, granting relief for service tax paid on ‘Speed Post’ services, while upholding the rejection for other services, citing the one-year time limit. This decision was formalized in an order dated 31.05.2019. The appellants, still aggrieved by the partial rejection, brought the case before the Tribunal.
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Upon reviewing both sides’ arguments and the case records, including a written submission, the tribunal focused on whether service tax paid on input services used for exporting medicines during the specified period was refundable under Notification No. 41/2002-S.T. dated 29.06.2012. According to this notification, refunds are granted for service tax paid on specified services used in exporting goods, subject to the fulfillment of certain conditions and the one-year time limit from the date of export, as per Section 11B(1) of the Central Excise Act, 1944.
The original authority had rejected the claims for being filed beyond the one-year deadline. The tribunal found that compliance with the conditions, including the time frame, is mandatory for claiming a refund under the notification. The legal provisions under Section 11B of the Central Excise Act, 1944, which apply to service tax matters, clearly mandate that refund applications must be filed within one year from the relevant date. In this case, the refund claims, relating to exports made in four quarters between April 2013 and January 2014, were filed on 06.06.2018, exceeding the one-year limit.
The Tribunal, led by Technical Member M.M. Parthiban, noted that the Commissioner (Appeals) had already examined this issue and confirmed that the refund claims were time-barred. However, part of the refund was allowed because the service tax paid for postal services was considered a ‘deposit’ and not a ‘tax,’ thereby not subject to the one-year limit under Section 11B. As neither the revenue department nor the appellants challenged this decision, the Tribunal did not address it further.
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Regarding the appellants’ challenge to the refund denial for services related to freight, banking, and other financial services, the tribunal concluded that these claims were filed beyond the statutory time limit and were therefore barred by Section 11B of the Central Excise Act, 1944. Consequently, the tribunal dismissed the appeal.
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