Commissioner Of Central Excise, Pune ... vs M/S. Computer Land Uk Ltd

(Arising out Order-in-Appeal No. PUN-EXCUS-003-APP-341-13-14 dated 01.01.2014 passed by the Commissioner of Central Excise (Appeals), Pune III)

For approval and signature: Honble Mr. M.V. Ravindran, Member (Judicial)

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 No 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?

Commissioner of Central Excise, Pune III Appellant

Vs.

M/s. Computer Land UK Ltd. Respondent

Appearance:

Shri A.B. Kulgod, AC (AR) for the appellant Shri Prasad Paranjape, Advocate for the respondent

CORAM:

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

Date of hearing : 13.04.2015 Date of decision : 13.04.2015

O R D E R No:..

This appeal is filed by the revenue against Order-in-Appeal PUN-EXCUS-003-APP-341-13-14 dated 01.01.2014.

2. Revenue is aggrieved by the said order as the first appellate authority has set aside the impugned order vide which the appellants refund claim to the extent of `13,85,401 has allowed.

3. Heard both sides and perused the record.

4. On perusal of the record, it transpires that the first appellate authority has clearly recorded the factual matrix of the case as to there being no dispute that the appellant had rendered export of services and has availed Cenvat credit of the input services received by him. Revenue is only disputing the quantum of the refund claim which has been sanctioned to the appellant based upon the finding that the provisions of Rule 5 of the CENVAT Credit Rules, 2004 contemplates for sanctioning of the refund based upon a formula which according to the Revenue authorities indicates that the appellant has been sanctioned additional refund which is not due to them.

5. On perusal of the said formula and the case, I find that the appellant have claimed that invoice no. Mar 12-01 and Mar 12-02, both dated 30.03.2012 were for the year 2011-12 but payments were received subsequently in the Financial year 2012-13 and they availed refund accordingly. Revenue wants to eliminate these two invoices from the export turnover of the goods but they want to include the Cenvat credit in the total turnover of export of goods. This view which has been propounded by the ld. Departmental Representative and the appeal of the department is canvassing the findings expressed by the Adjudicating Authority.

6. I find that this view is incorrect as, if the revenue wants to reduce the value of the invoices from the export turnover, the same also should be removed from the total turnover of the export. I find the first appellate authority has correctly recorded the factual matrix which is reproduced below:

15. I find that it is clearly mentioned in the new Rule 5(2) of the CCR that the new Rule shall apply to exports made on or after the 1st April, 2012. Further, 'export service' has been defined under clause (1) of Explanation 1 under the new Rule 5 and the same reads as under:

"(1) 'export service' means a service which is provided as per the provisions of Export of Services Rules, 2005, whether the payment is received or not;"

From this definition it is clear that for the purposes of new Rule 5 of the CCR, receipt of payment is immaterial and only the actual export of service by way of its provision & issuance of invoice remain the relevant criteria. As per the first proviso to Rule 5(2) of the CCR, refund in respect of services exported could be made under the old Rule 5 of the CCR within a period of one year, i.e. upto 31.03.2013. In other words, for the exports made upto 31.03.2012, refund was admissible under the old rule 5 of the CCR and for the exports made on or after 01.04.2012, refund is admissible under the new Rule 5 of the CCR. Accordingly, for all exports completed upto 31.03.2012 by way of their provision & issuance of invoice, the new Rule 5 of the CCR is not applicable.

16. Applying the provisions described in Para 15 above on the present case, I find that the Appellant have included the Invoice No. Mar'12-01 and Invoice No. Mar 12-02, both dated 30-03-2012, in the present refund claim on the ground that payments in respect of the same were received on 11-04-2012.

However, the export of services covered by the said invoices had been completed prior to 31-03-2012, as reflected in the date of issuance of the said invoices. As provisions of new Rule 5 of the CCR are applicable to the exports made on or after 01-04-2012, the exports covered said invoices issued prior to 01-04-2012 have to be excluded from the present refund claim for arriving at export turnover of the present quarter of April 2012 to June 2012. For calculating export turnover of the services and total turnover of services for relevant period of April-June 2012, only those services which were provided after 01-04-2012 need to be considered. Further, it is clear from the figures mentioned in the Order-in-Original that the Appellant had exported their entire turnover and had not provided any services to Domestic Tariff Area in the relevant period. Therefore, the 'export turnover' would be equal to the 'total turnover', in terms of clause (E) of Rule 5(1) of the CCR. Accordingly, the figures of 'Export Turnover of Services' and Total Turnover' come to Rs.11,95,79,832/- each.

17. In view of the above discussions, I find that the admissible refund amount needs to be re-calculated. The same is done as under:

Export turnover of services = 11,95,79,832/-

Total Turnover= 11,95,79,832/-

Net CENVAT Credit=41,52,535/-

Refund = Export turnover of services X Net CENVAT credit amount Total turnover = 11,95,79,832 x 41,52,535 = 41,52,535/- 11,95,79,832 Since refund of Rs. 27,67,134/- has already been granted vide the impugned Order-in-Original, the appellant are found entitled to further refund of Rs.13,85,401/- only. (41,52,435/- minus 27,67,134/- = 13,85,401/-)

7. I find that there is no infirmity or illegality in the Order-in-Appeal which has set aside the Order-in-Original.

8. I also find that the objection raised by the Adjudicating Authority as to the filing of the refund claim beyond the limitation period also does not sustain for simple reason that the appellant had filed a refund claim on receipt of the foreign exchange involved in the export of services. The said refund claim has been filed within one year from the receipt of the FIRC. This view is well settled by the judgment in Bechtel India P. Ltd. 2014 (34) STR 437 (Tri-Del).

9. In my considered view, the impugned order is correct and legal and does not suffer from infirmity. Appeal filed by the revenue is rejected and the cross objection of the appellant is also disposed of.

(Dictated in Court)

(M.V. Ravindran)

Member (Judicial)

//SR

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