Aam Services India Pvt. Ltd vs Commissioner Of Central Excise

IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,WEST ZONAL BENCH AT MUMBAI

COURT No. I

APPEAL No.ST/165/11

(Arising out of Order-in-Appeal No.P-III/VM/323-324/2010 dated 01/12/2010 passed by Commissioner of Central Excise (Appeals), Pune-III)

For approval and signature:

Honble Mr.M.V. Ravindran, Member (Judicial) Honble Mr. Raju, Member (Technical)

1. Whether Press Reporters may be allowed to see :No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the :Yes CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether Their Lordships wish to see the fair copy :Seen of the Order?

4. Whether Order is to be circulated to the Departmental :Yes authorities? ========================================

AAM Services India Pvt. Ltd., Appellant Vs. Commissioner of Central Excise, Respondent Pune-III

Appearance:

Shri.D.R.Gadekar, Consultant for appellant Shri.S.R.Nair, EO (AR), for respondent

CORAM:

Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. Raju, Member (Technical)

Date of Hearing : 15/07/2015 Date of Decision : 15/07/2015

ORDER NO

Per: M.V. Ravindran

1. This appeal is directed against Order-in-Appeal No.P-III/VM/323-324/2010 dated 01/12/2010 passed by Commissioner of Central Excise (Appeals), Pune-III.

2. Heard both sides and perused the records.

3. The issue involved in this case is regarding rejection of refund claim of an amount of Rs.15,10,021/- as filed by the appellant for the refund of amount of service tax credit taken on the inputs service and used for export services during the period January 2009 to March 2009. The appellant had filed a refund claim of the said amount on 25/03/2010. The said refund claim was rejected by the adjudicating authority on the ground of limitation stating therein that the refund claim should have been filed within the period of one year from the date of raising of the invoices for the export services rendered. The first appellate authority has also upheld the findings recorded by the adjudicating authority.

4. Learned Consultant would draw our attention to the facts of the case and submits that foreign exchange realization for the service exported during January 2009 was received during the period April to June 2009. It is his submission that judgement of the Tribunal in the case of Bechtel India Pvt. Ltd., Vs. CCE, Delhi reported in 2014 (34) STR 437 (Tri-Del), settled that refund application should be filed within a period of one year from the date of foreign exchange received in India, and in this case refund application has filed well within the period as per the judgement. It is also his submission that the said judgement of the Tribunal was upheld by the Honble High Court of Andhra Pradesh in the case of CCE Hyderabad Vs. Hyundai Motor India Engineering (P) Ltd., reported in 2015-TIOL-739-HP-AP-ST.

5. Learned DR on the other hand would draw our attention to the provisions of the Notification 5/2006-CE(NT) and submits that the said notification discusses about the submission of application for refund in prescribed Form A before the expiry of period specified under Section 11B of the Central Excise Act, 1944. It is his submission that since the invoices for the services rendered, which were exported were in the month of January and February 2009 and the refund claim having been filed on 26/03/2010, the refund has been correctly rejected and hit by limitation.

6. On careful consideration of the submissions made by both the sides, we find that there is no dispute as to the fact that the appellant had exported the services and are claiming the refund of the service tax paid on the input services, which are used for providing such export service. It is also undisputed that the refund claims have been filed on 26/03/2010 and that foreign remittance have come during the period April to June 2009. On this factual matrix, we find that the issue is no more res integra as Bench of this Tribunal in the case of Bechtel India Pvt. Ltd. (Supra), while analyzing the same provisions held as under:

4.?Issue involved in these appeals is whether claims filed by the appellants are time-barred as held by lower authorities or in time as claimed by the appellants.

5.?These claims have been filed under Rule 5 of the Cenvat Credit Rules which reads as under :-

Rule 5.?Refund of Cenvat Credit. - Where any input or input service is used in the final products which is cleared for export under bond or letter of undertaking, as the case may be, or used in the intermediate products cleared for export, or used in providing output service which is exported, the Cenvat credit in respect of the input or input service so used shall be allowed to be utilized by the manufacturer or provider of output service towards payment of,

(i) Duty of excise on any final products cleared for home consumption or for export on payment of duty; or

(ii) Service tax on output service, and where for any reason such adjustment is not possible, the manufacturer shall be allowed refund of such amount subject to such safeguards, conditions and limitations, as may be specified, by the Central Government, by notification.

[Explanation. - For the purposes of this rule, the words output service which is exported means the output taxable services exported in accordance with the Export of Services Rules, 2005.] Condition, safeguards and limitation have been prescribed under Notification 5/2006, dated 14-3-2006 Relevant extract of which are reproduced below :-

In exercise of the powers conferred by rule 5 of the Cenvat Credit Rules, 2004 (hereinafter referred to as the said rules) and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 11/2002-Central Excise (N.T.), dated 1st March, 2002, published in the Gazette of India Extraordinary, vide number G.S.R. 150 (E), dated 1st March, 2002, the Central Government hereby directs that refund of Cenvat Credit shall be allowed in respect of :

(a) Input of input service used in the manufacture of final product which is cleared for export under bond or letter of undertaking

(b) Input or input service used in providing output service which has been exported without payment of service tax, subject to safeguards, conditions and limitations, set out in the Appendix to this notification Appendix

1. The final product or the output service is exported in accordance with the procedure laid down in the Central Excise Rules, 2002, or the Export of Service Rules, 2005, as the case may be.

2 .

3 .....

4 ..

5 

6. The application in Form A, along with the prescribed enclosures and the relevant extracts of the records maintained under the Central Excise Rules, 2002, Cenvat Credit Rules, 2004 or the Service Tax Rules, 1994, in original, are filed with the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, before the expiry of the period specified in section 11B of the Central Excise Act, 1944. As per condition 1, output service is to be exported as per Export of Services Rules, 2005.

Rule 3 of the Export of Services Rules, 2005 is reproduced below :-

Rule 3. Export of taxable service. - The export of taxable service means,-

(1) ..

(2)  (3) in relation to taxable services, other than,

(i) the taxable services specified in sub-clauses (a), (f), (h), (i), (j), (l), (m), (n), (o), (p), (q), (s), (t), (u), (v), (w), (x), (y),\ (z), (zb), (zc), (zi), (zj), (zn), (zo), (zq), (zr), (zt), (zu), (zv), (zw), (zza), (zzc), (zzd), (zzf), (zzg), (zzh), (zzi), (zzj), (zzl),(zzm), (zzn), (zzo), (zzp), (zzq), (zzs), (zzt), (zzv), (zzw), (zzx), [(zzy), (zzza), (zzzb), (zzzd), (zzze), (zzzf) and (zzzh),]; and

(ii) the taxable service specified in sub-clause (d), and(zzzc) as are provided in relation to an immoveable property, of clause (105) of section 65 of the Act,-

(i) such taxable services which are provided and used in or in relation to commerce or industry and the recipient of such services is located outside India :

Provided that if such recipient has any commercial or industrial establishment or any office relating thereto in India, such taxable services provided shall be treated as export of services only if.-

(a) order for provision of such service is made by the recipient of such service from any of his commercial or industrial establishment or any office located outside India;

(b) service so ordered is delivered outside India and used in business outside India; and

(c) payment for such service provided is received by the service provider in convertible foreign exchange;

(iii) Such taxable services which are provided and used, other than in or in relation to commerce or industry, if the recipient of the taxable service is located outside India at the time when such services are received.

Similarly relevant date as defined under Section 11B of Central Excise Act, is as under :

Section 11B Explanation.- (B) relevant date means,-

(a) in the case of goods exported out of India where a refund of excise duty paid is available in respect of the goods themselves or, as the case may be, the excisable materials used in the manufacture of such goods,

(i) if the goods are exported by sea or air, the date on which the ship or the aircraft in which such goods are loaded, leaves India, or

(ii) if the goods are exported by land, the date on which such goods pass the frontier, or

(iii) if the goods are exported by post, the date of dispatch of goods by the Post Office concerned to a place outside India.

(b) .

(c) ..

(d) 

(e) .

(ea) .

(eb)  (ec) ..

(f) in any other case, the date of payment of duty.

7.?On going through above provisions for claiming refund under Rule 5 of the Cenvat Credit Rules, 2004, output is required to be exported in accordance with procedure laid down in Export of Service Rules, 2005 (as per condition 1 of the Appendix to Notification 5/2006), once service is exported refund claim can be filed subject to limitation as prescribed under Section 11B of the Act. In the instant case export of service is complete only when foreign exchange is received in India as per Export of Service Rules, 2005 (i). In the Section 11B, relevant date for refund of export of goods is date of export. Section 11B is made applicable for claiming refund under Rule 5 of the Cenvat Credit Rules as per condition 6 of Notification 5/2006. In case of export of Services, export is complete only when foreign exchange is received in India. Therefore relevant date of export of services is date of receipt of foreign exchange. In the present case all the four claims have been filed within 1 year from the date of receipt of foreign exchange and are therefore filed in time and cannot be held as time barred.

7. We also find that the learned Consultant was correct in stating that this judgement of the Tribunal has been upheld by the Honble High Court in the case of Hyundai Motor India Engineering (P) Ltd. (supra).

8. Since the issue is settled in favour of the appellant, we find that the impugned orders of rejection of refund claim of Rs.11,41,592/- on the ground of limitation, are liable to be set aside and we do so. The appeal is allowed with consequential relief, if any.

(Dictated in Court)

(Raju) Member (Technical) (M.V. Ravindran) Member (Judicial)

pj

1 8