Volkswagen 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/599/11

(Arising out of Order-in-Appeal No. PI/RKS/110/2011 dated 02.08.2011 passed by Commissioner of Central Excise, Pune I)

For approval and signature:

Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. C.J. Mathew, Member (Technical)

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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?

Volkswagen India Pvt. Ltd.

Appellant Vs.

Commissioner of Central Excise Pune I Respondent

Appearance:

Shri Sanjeev Dahiya, G.M. (taxation) for appellant Shri S.R. Nair, E.O. (AR) for respondent

CORAM:

Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. C.J. Mathew, Member (Technical)

Date of Hearing: 09.09.2015 Date of Decision: 09.09.2015

ORDER NO

Per: M.V. Ravindran

This appeal is directed against Order-in-Appeal No. PI/RKS/110/2011 dated 02.08.2011.

2. Heard both sides and perused the records.

3. The relevant facts which needs to be considered in this case is whether the appellant is eligible for the refund of an amount paid by them as service tax on the services exported under the category of Business Auxiliary Services and Business Support Services to an entity in Germany and Yugoslavia. Appellant filed a refund claim for Rs.73,03,154/- on 04.01.2011 in an appropriate form. Asst. Commissioner (Service Tax), Central Excise, Pune I Commissionerate by a speaking order sanctioned the rebate of Rs.49,73,683/- and rejected the rebate claim of Rs.23,29,471/- on the ground that this rebate claim is hit by limitation as consideration for this bill was received by the appellant by a FIRC dated 18.12.2009 and the refund claim should have been filed before 18.12.2010 while the refund claim was filed with the department on 04.01.2011. Aggrieved by such an order, appellant preferred an appeal before the first appellate authority. The first appellate authority also upheld the order-in-original.

4. On consideration of the submissions made by both the sides, we find that the issue involved in this case is in a very narrow compass. It is undisputed that the appellant had exported the services in December 2009 for which the payment was received by the appellant under FIRC No. 20093521976 dated 18.12.2009. It is the case of the appellant that the services were exported in December 2009 for which appellant is required to discharge the service tax liability in the subsequent month before 5th of January 2010 and they have discharged the service tax liability on 05.01.2010 and filed a refund claim on 04.01.2011 which is within one year while the case of the Revenue is that as per the judgement of the Tribunal in the case of Bechtel India Pvt. Ltd.  2014 (34) STR 437 (Tri.  Del) that refund of service tax needs to be considered on the date of receipt of the foreign inward remittance. We find that the lower authorities as well as the arguments of the learned D.R. are untenable for more than one reason.

4.1 Firstly, the relevant provisions of Notification No.11/2005-ST dated 19th April 2005 reads as under.

Export of Services - Rebate of Service tax and Cess on taxable services exported to any ountry other than Nepal and Bhutan - Conditions and procedures

In exercise of the powers conferred by rule 5 of the Export of Service Rules, 2005 (hereinafter referred to as the said rules), insofar as it relates to export of taxable services to the countries other than Nepal and Bhutan, the Central Government hereby directs that there shall be granted rebate of the whole of the service tax and cess paid on all taxable" services exported in terms of rule 3 of the said rules, to any country other than Nepal and Bhutan, subject to the conditions, limitations and procedures specified hereinafter, - '\

2. Conditions and limitations :_ I

(a) that the taxable service has been exported in terms of rule 3 of the said rules and payment for export of such taxable service has been received in India in convertible foreign exchange;

(b) that the service tax and cess, rebate of which has been claimed, have been paid on the taxable service exported;

(c) the amount of rebate of service tax and cess admissible is not less than five hundred rupees; and

(d) that in case, -

(i) the service tax and cess, rebate of which has been claimed, have not been paid; or

(ii) the taxable service, rebate on which has been claimed, has not been exported, the rebate paid, if any, shall be recoverable with interest as per the provisions of section 73 and section 75 of the Finance Act, 1994 (32 of 1994)as if no service tax and cess have been paid on such taxable service.

It can be seen from the above reproduced relevant provisions of Notification, the conditions and limitations for granting the refund of the service tax paid on services exported are that the taxable service should have been exported and the payment for such services should have been received in convertible foreign exchange; that the service tax and cess have been paid on taxable service exported. In the case in hand there is no dispute as to the services have been exported and the payment has been received in a convertible foreign exchange. It is also undisputed that the amount of service tax liability on the services exported are to be paid on or before 5th January 2010 for the services exported in the month of December 2009 and such tax liability is paid by the appellant. The relevant date for refund in the case of rebate should be, in our view from the date of payment of service tax on the taxable services exported.

4.2 Secondly, we find that similar issue came up before this Bench in the case of Vodofone Cellular Ltd.  2014-TIOL-319-CESTAT-MUM wherein the issue of time limit of filing refund claim under the very same Notification was before the Bench and it was held that if the refund claim are filed beyond the period of one year from the date of payment of service tax, the refund claim are liable to be rejected, which would in turn would support the view as proposed by the appellant before us.

4.3 In view of the foregoing, we find that the impugned order which upholds the rejection of refund claim of Rs.23,29,471/- is incorrect and the appellants appeal needs to be allowed and we do so.

5. Impugned order to the extent it is contested before us is set aside and the appeal is allowed with consequential relief, if any. (Dictated in Court)

(C.J. Mathew) Member (Technical) (M.V. Ravindran) Member (Judicial)

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Appeal No. ST/599/11