2013 (4) TMI 239 - AT - Service Tax

Refund of service tax paid on various input services - export of services - foreign exchange - Held that - According to the RBI instructions no Indian firm can be paid in foreign currency in India. The certificate issued by ICICI Bank (their banker) confirms that payment of Canadian company was converted into Indian currency and paid to the appellant. Thus the rejection of refund claims on this ground is unwarranted. Refund claim is time barred - Held that - The total amount held to be ineligible is Rs. 1.05 lakhs only, the appellant is willing to forego the same and will not contest the same. Thus this portion of the appeal is held as uncontested and rejection is upheld. Non maintenance of proper accounts in respect of input services - Held that - As a statement showing details maintained in computer was produced containing all the details which are required for verifying the type of service received, the amount of consideration paid, Service tax payable and paid, date of payment of Service tax by the appellant, name of service provider, etc. Also the invoices received by the appellant contain all the details and the account maintained in the computer also contains all the details. Thus as appellant is maintaining detailed account in the computer system, this is not a valid ground for rejection of refund claim.

Summary

Issues:
Refund claim related to two different periods - Rejection of refund claim on three grounds - (1) Consideration not received in foreign currency, (2) Time-barred claim amount, (3) Alleged improper maintenance of accounts.

Analysis:
The appellant, a service provider for Business Support Service, filed two refund claims for service tax paid on input services exported only. The Revenue rejected the claims citing three grounds. Firstly, it contended that the consideration was not received in convertible foreign currency. Secondly, it argued that a portion of the claim was time-barred due to lack of service date availability. Thirdly, it alleged improper maintenance of accounts by the appellant.

Upon hearing both sides, the appellant provided evidence through a certificate issued by their banker, ICICI Bank, confirming that the payment received from a Canadian firm was converted into Indian currency and paid to the appellant. Citing RBI instructions, the Tribunal agreed that the rejection based on non-receipt in foreign currency was unwarranted.

Regarding the time-barred claim amount, the appellant agreed to forego the small amount involved, amounting to Rs. 1,05,813, and did not contest its rejection. This portion of the appeal was held as uncontested and rejection was upheld.

In response to the allegation of improper accounts maintenance, the appellant produced a statement showing detailed computerized accounts containing all necessary information. The Tribunal noted that the computerized accounts fulfilled legal requirements and contained all required details from invoices. It was established that maintaining accounts in a computer system was legally permissible, and the appellant's detailed record-keeping was deemed sufficient. Therefore, the ground for rejection based on improper accounts maintenance was considered invalid.

Consequently, the appeal was allowed except for the contested amount of Rs. 1,05,813, which was rejected. The judgment was dictated and pronounced in court.