Refund of ST in respect of goods exported - Faulty Circular breeds contempt
IN dated 06.10.2007 [as it then existed], paragraph 1, proviso clause (e) read -
“(e) the said goods have been exported without availing drawback of service tax paid on the specified services under the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995;"
Further in the said notification, paragraph 2(e) read -
“(e) the claim for refund shall be filed on a quarterly basis, within sixty days from the end of the relevant quarter during which the said goods have been exported:"
Notification dated 18.11.2008 amended clause 2(e) in the following manner -
“In the said notification,-
(1) in paragraph 2, in sub-paragraph (e), for the words "sixty days", the words "six months" shall be substituted;"
So also Notification dated 07.12.2008 further amended the notification in the following manner-
“In the said notification, -
(1) in paragraph 1, in the proviso, sub-paragraph (e) shall be omitted;"
Because of the aforesaid Notifications 32/2008-ST and , more particularly 32/2008-ST a refund claim could be filed within six months of the close of the quarter and, therefore, the claim for the Quarter April, 2008 to June, 2008 which ought to have been filed by 31st August, 2008 could now be filed within six months from the end of the quarter i.e by December, 2008 by giving a retrospective effect to the notifications 32 & as is suggested by the Board Circular dated 12.03.2009. Incidentally the preceding Circular dated 11.12.2008 on the subject matter ought to have clarified this issue but unfortunately it did not.
Let us also take a look at the clarification doled out by the Circular on this convoluted subject of Refund of Service Tax in respect of goods exported. The subject title reads “Filing of claim for refund of service tax paid under notification No. dated 6/10/2007 - reg" and the tabulation extract is as below -
TABLE
S. No. | Issue Raised | Clarification |
|---|---|---|
I | Notification No. has been amended by notification Nos. , dated 18.11.2008 and , dated 7.12.2008 to (i) extend the limitation period from 60 days from the end of quarter to six month; (ii) to omit the condition of non-availment of drawback. Whether, in view of amended conditions, refund for the quarter Mar-Jun 08 would be allowed to be filed till Dec 08? | It is clarified that consequent upon revision of limitation period, any refund claim that is filed within such revised limitation period would be admissible if it is otherwise in order. Therefore, refund claims of service tax on specified taxable services used for exports of goods made in the quarter Mar-Jun 08 could be filed till 31st Dec 08. |
Did you find anything amiss in the portion marked in RED. It reads “quarter Mar-Jun 08".
Quarter is 1/4 th and 1/4 th of a year is 3 (three) months. But March to June is four months!
So, this clarification is factually wrong inasmuch as since Quarter cannot be March to June, 2008, filing the refund for the aforesaid period till 31st December, 2008 would not be proper. One may, however, say that the refund for the singular month of March, 2008 ONLY is in jeopardy and this is true. Since the notification increasing the time limit of filing refund claim for a quarter was extended from ‘sixty days' to ‘six months' by the amending notification , the only quarter that comes into reckoning is "April to June, 2008".
No doubt, this clarification has been issued only on 12th March, 2009 and the assessees but naturally would have already filed the refund claims by this time and it was only a matter of factual ascertainment that was necessary namely whether the claim was filed by 31st December, 2008 for the quarter April to June, 2008.
But can an assessee justify his claim of refund for the month of March, 2008 on the strength of this Board Circular no. Or would this be considered an error apparent on the face?
Find out in this CESTAT decision 2012-TIOL-1021-CESTAT-Mum.