Order Date – 05 July 2023

Parties: M/s. JVS Export Vs Commissioner of GST & Central Excise

Facts –

• The Appellant, M/s. JVS Export, are paying Service Tax under Reverse Charge Mechanism (RCM) on the foreign Agents Commission used for the export of goods. They filed, a refund claim under the provisions of Notification No. 17/2009-ST dated 7.7.2009 on 6.7.2010 for refund of service tax paid by them under the category of business auxiliary service on the commission paid to their foreign agent.
• A Show Cause Notice was issued to them proposing rejection of the said refund claim on the ground that the said business auxiliary service was not specified under the said notification. In their reply to the notice, they requested to split the claim to be processed under notification 41/2007 dated 6.10.2007 for the period before 7.7.2009 and the claim to be processed under Notification No. 18/2009-ST dated 7.7.2009 for the period from 7.7.2009
• The refunds were rejected on the ground that the impugned claim was not filed within six months stipulated under Notification No. 41/2007-ST dated 6.10.2007. He rejected the other portion of the refund claim on the ground of absence of any provision for refund under the Notification No. 18/2009-ST dated 7.7.2009.

Issue – 

• Whether the appellant is entitled to refund of service tax paid on commission?

Order – 

• The Tribunal observed that issue relating to the time limit set by Notification No. 41/2007 has been examined by this Bench in the case of Core Minerals by following the decision of Hon’ble Apex Court held that “the time limit prescribed under the substantive legislation, namely, Section 11B, is applicable. We also note that even the subsequent subordinate legislation in the form of Notification No. 17/2009 dated 07.07.2009 has prescribed time-limit of one year.”
• Further coordinate Bench of this Tribunal in Balkrishna Textiles Pvt. Ltd. was held that the relevant date of computing six months under Notification 41/2007-ST is to be taken on the date when service tax is paid and not from the first day of the month following the quarter in which the export is made. Hence it was held that the time limit should be construed accordingly.
• With respect to the claim of refund by the appellant as per Notification No. 17/2009 dated 7.7.2009, it was observed that the duty has been paid under mistake of law because they followed the pattern of the earlier exemption Notification No. 41/2007 dated 6.10.2007, but when they realized their mistake, they have claimed a refund of duties paid. The refund of the same paid under a mistake, cannot be denied to them, when the claim is filed within time as per section 11B.
• Following the decision of The Hon’ble Supreme Court in its judgement in Share Medical Care Vs Union of India [2007 (209) E.L.T. 321 (S.C.)] held that the appellants are eligible for the duty paid mistakenly when they were eligible for exemption under Notification 17/2009-ST dated 07/07/2009. Since the appellant is eligible for exemption the issue of failure of the appellants to comply with the various conditions stipulated under the Notification No. 5/2006-CE (NT) dated 14.3.2006, issued under Rule 5 of CENVAT Credit Rules, 2004 does not survive.
• Thus, the refund claim to have been filed within time and is liable to be sanctioned as per law. The appeal is allowed.