1. Being aggrieved with the order passed by Commissioner (Appeals), Revenue has filed the present appeal.
2. After hearing both the sides duly represented by Shri Govind Dixit, ld. Departmental Representative and Shri AK Batra, ld. advocate for the
respondent, we find that the appellants are providing marketing services to its principal situated in a foreign land. They were depositing the service tax
on the said services, by treating the same as falling under the category of “Business Auxiliary Serviceâ€. However, subsequently they realised that
as they are providing services to an overseas principal, the same would amount to “Export of Servicesâ€, which were not liable to service tax.
Accordingly, they filed refund claims of service tax paid by them in cash as also through CENVAT credit.
3. The original adjudicating authority rejected the refund claims by observing that the appellant’s activities correctly fall under Business Auxiliary
Services, which are liable to service tax. He did not agree with the contention of the appellants that the same would amount to export of services and
as such that liable to pay service tax.
4. The said order of the original adjudicating authority was challenged by the appellant before commissioner (Appeals). The appellate authority
observed that the appellant’s activities would amount to export of services under Export of Service Rules, 2005 and as such would not be liable to
service tax. He, accordingly, allowed the refund of service tax to the extent of Rs.13, 35,013/- (Rupees thirteen lakh thirty five thousand and thirteen
only), paid by the appellant in cash. However, the balance refund of Rs.3,64,039/- (Rupees three lakh sixty four thousand and thirty nine only), paid by
the appellant through CENVAT credit was rejected by him on various grounds, including the ground of limitation.
5. Revenue is in appeal against the said order on the ground that the appellant’s activities of undertaking marketing operations for its foreign based
principal cannot be held to be export of services. Revenue has also challenged a part of the refund claim on the ground that the same was barred by
limitation.
6. As regards merits of the case, we find that the issue is no more res integra and stands settled by the majority decision of the Tribunal in the case of
Paul Merchants Ltd. Vs. CCE, Chandigarh [2013 (29) STR 257 (Tri. - Del.)] as also in the case of M/s GAP International Sourcing (India) Pvt. Ltd.
vs. CST, Delhi [2014-TIOL-465-CESTAT-Delhi]. As such, we find no merits in the appeal of Revenue.
7. We further note that Revenue has also contended that the part of the refund stands filed after the normal period of limitation. We note that while
rejecting the refund claim of the assessee relatable to payment of service tax through CENVAT credit, Commissioner (Appeals) has observed as
under:-
“The next question before me is whether the limitation prescribed under Sec.11B is applicable in this case or not. The contention of the
appellant is that the said amount was not a tax, hence the one year bar is not applicable in this case, but I find that the contention of the
appellant is not sustainable as the Hon’ble High Court of Delhi, in Jumax Foam (P) Ltd. v. UOI, 2003 (157) ELT 252 (Del.), had held as
under:-
4. In view of the authoritative pronouncement of the Supreme Court that even for refund of an illegal levy claim application has to be moved
before the customs authorities within the period of six months, in my view, the present writ claiming the refund of the duty alleged to have
been paid in excess will not be maintainable. Moreover, duty having already been recovered by the petitioners from the purchaser the
petitioner would not be entitled to the refund of the alleged excess duty from his purchaser at one end and also collect the same duty from
the State on the ground that the same was collected from him illegally. Power of the Court is not meant to be exercised for unjustly enriching
a person. I, therefore, do not find any merits in this petition and the same is, accordingly, dismissed with no order as to costs.
From the above, it is clear that the provisions contained in Section 11B of the Central Excise Act, 1944, as made applicable to the Service
Tax matters are squarely applicable in this case. In this case the applicant had paid the Service Tax on the services which qualifies as
‘Export of Service’ and the payments were made both in Cash as well as by way of debit of CENVAT Credit A/c. The cash payments
were made much beyond the due date of payment of Service Tax. The said claim was filed within one year from the date of payment of tax,
but after the expiry of one year from the due date of payment of tax. The Original Adjudicating Authority found that the payment from
CENVAT Credit was deemed to be made on the due date of payment of tax, hence the claim is barred by limitation to that extent. I find no
infirmity in the said findings. Moreover, the claim of refund of payments made by way of debit in CEMNVAT Credit A/c. is, otherwise also
not admissible on merits, as discussed hereinafter.â€
The above part of the order of the Commissioner (Appeals) does not stand challenged by the assessee. As such it can be concluded that the same has
attained finality. Otherwise also we find that the law on the limitation is well settled and the Tribunal being the creature of statute, cannot go beyond
the provisions of the Act or Rules. The reliance placed by Commissioner (Appeals) on the decision of Hon’ble High Court of Delhi in the case of
Jumax Foam (P) Ltd. Vs. Union of India [2003 (157) ELT 252 (Del.)] is appropriate. As such, we find no merits in the contention of the ld. advocate
appearing for the respondent that the said refund has to be treated as a mere deposit, in which case, no limitation would apply.
8. At this stage, we are informed by the ld. advocate that only an amount of Rs.58,059/- (Rupees fifty eight thousand and fifty nine only) would fall
outside the limitation period. In as much as the original adjudicating authority has not dealt with the aspect of limitation independently and has not
calculated the amount falling outside the limitation period, we deem it fit to remand the matter to the original adjudicating authority for fresh decision, in
the light of the observations made by us in the preceding paragraphs.
9. In view of our foregoing observations and reference to the Hon’ble High Court decision under whose jurisdiction we fall, it is not considered fit
to refer to all the decisions relied upon by the ld. advocate by the respondent.
10. Revenue’s appeal is disposed of in the above manner.
(Dictated and pronounced in the Open Court)
