Limitation to be Counted from Initial Filing and Not Resubmission: CESTAT Allows Refund of Service Tax on Export Services [Read Order]

The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) Bench at Chennai, held that refund claims filed within the prescribed limitation period cannot be rejected as time-barred merely because they were later resubmitted after rectifying procedural deficiencies.

The Bench allowed the appeal and set aside the Order-in-Appeal passed by the Commissioner (Appeals), Madurai, under Notification No. 41/2012-ST dated 29.06.2012.

The appellant, M/s. Jenrich Agro Products Pvt. Ltd., engaged in the export of maize, jaggery powder, and salt, had filed a refund claim of ₹7,52,952 for service tax paid on specified input services used for exports during October 2013 to March 2014. The refund application was filed on 18.09.2014, and resubmitted on 29.05.2015 after rectifying minor procedural deficiencies.

The adjudicating authority sanctioned ₹7,49,084 and disallowed ₹3,868. However, the Department appealed, contending that the services availed such as terminal handling, insurance, inspection, and courier services were beyond the “place of removal” and hence ineligible; and the date of resubmission should be treated as the filing date, making the claim time-barred under the one-year limitation rule. The Commissioner (Appeals) accepted the Department’s view and reversed the refund, leading to the present appeal before the Tribunal.

The Tribunal, comprising Vasa Seshagiri Rao (Technical Member), first noted that the lower appellate authority’s order was silent on the “specified services” issue, effectively rejecting the Revenue’s contention that services beyond the factory gate were ineligible.

Referring to Notification No. 1/2016-ST dated 03.02.2016, read with Section 160(2) of the Finance Act, 2016, the Bench clarified that the definition of “specified services” had been amended retrospectively, thereby including services used beyond the place of manufacture for exports.

On the question of limitation, the Bench held that the date of initial filing of the refund claim must be considered the relevant date, not the date of resubmission. It relied on a consistent line of precedents, including Chennai Petroleum Corporation Ltd. v. CGST & C.Ex. [2019 (369) ELT 1636 (Tri. – Chennai)], CCE v. Arya Exports and Industries [2005 (192) ELT 89 (Del.)], and Repco India Ltd. v. CCE Belapur [2016 (43) STR 203 (Tri. – Mumbai)], all of which held that procedural rectifications do not alter the original filing date.

The Bench observed, “Rejection of refund claims as time-barred by ignoring the date of initial filing is not sustainable,” stating that exporters’ rights should not be defeated on procedural grounds.

The Tribunal also held that the Commissioner (Appeals) had exceeded his jurisdiction by questioning the Chartered Accountant’s certificate, as this issue was never raised in the Department’s appeal.

Holding that the refund was filed within time and that the amended definition of “specified services” applied retrospectively, the Tribunal set aside Order-in-Appeal No. 81/2016 dated 17.06.2016 and allowed the appeal with consequential relief.

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