CESTAT Hyderabad Rejects Exporter's Service Tax Rebate Claim Filed Beyond One Year From Let Export Order

The Hyderabad bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that a service tax rebate claim filed more than one year after the Let Export Order (LEO) is barred by limitation under a 2012 government notification governing export rebates.

The tribunal ruled that the notification prescribes its own limitation period. It cannot be extended by relying on the general refund provisions of the Central Excise Act.

A bench of Judicial Member Angad Prasad and Technical Member A.K. Jyotishi dismissed the appeal filed by R.R. Stones Pvt. Ltd. It also upheld the order of the Commissioner (Appeals), who had sanctioned only ₹15,120 out of the company's rebate claim of about ₹17.29 lakh and rejected the remaining claim as time-barred.

The tribunal observed, "We find that in view of the express provisions in the notification itself regulating the grant of rebate, the conditions have to be strictly followed. Moreover, this condition is not a procedural requirement as it has bearing on limitation."

R.R. Stones manufactures and exports Potash Feldspar Powder. It claimed a rebate of service tax paid on job work services used for its exports. The rebate application was filed in June 2018 for exports covered by Let Export Orders issued between April and June 2017. The refund sanctioning authority found that, except for two shipping bills, the claims had been filed more than one year after the relevant LEO dates. It therefore rejected about ₹17.14 lakh as time-barred while allowing only ₹15,120.

Before the tribunal, the exporter argued that the limitation period should be calculated from the end of the relevant quarter. Alternatively, it contended that the general refund provisions of the Central Excise Act should apply. It also argued that this interpretation would better serve the government's policy of encouraging exports. The exporter relied on several earlier tribunal rulings in support of its case.

The tribunal rejected those submissions. It observed that the 2012 notification expressly requires rebate claims to be filed within one year from the date of export. The notification also clarifies that the date of export is the date on which Customs issues the Let Export Order.

The tribunal further observed, "We also find that Commissioner (Appeals) has rightly observed that this is a self-contained notification, where for the purpose of limitation, section 11B has not been incorporated and a different provision has been made in the notification itself to regulate the limitation aspect. Therefore, we find that in this case, clearly the claims which are beyond one year of the LEO date and therefore would be hit by time bar."

The tribunal also observed that the decisions cited by the exporter were distinguishable. Those cases either involved notifications that did not prescribe a limitation period or expressly referred to the Central Excise Act's refund provisions.

By contrast, the notification governing this dispute contains its own limitation provision. The tribunal instead relied on its earlier rulings holding that rebate claims filed more than one year after the LEO are time-barred.

Finding no infirmity in the Commissioner's order, the tribunal upheld it and dismissed the appeal.

For Appellant: Advocate B. Srinivasa Rao,

For Respondent: A. Rangadham, Authorised Representative