2014 (12) TMI 203 - AT - Service Tax

Denial of refund claim - Scientific and Technical Consultancy Service - whether the refund claims have been filed within the time limit prescribed in Rule 5 of the Cenvat Credit Rules read with notification No. 5/2006 and Section 11B of the Central Excise Act - Held that - Under Section 83 of the Finance Act, the provisions of Section 11B of the Central Excise Act, shall apply in relation to service tax as they apply in relation to a duty of excise. Therefore, it is inferred that just as the relevant date in the case of Central Excise is the date of export of goods, the relevant date in the present case would mean would be the date on which the services are exported. This view is also stated in the case of M/s. Affinity Express India Pvt. Ltd. (2014 (6) TMI 593 - CESTAT MUMBAI) and GTN Engineering (I) (2011 (8) TMI 960 - MADRAS HIGH COURT). This being my stated view, the respondent would be eligible for refund in respect of all invoices except two invoices, namely invoice No. RPIN/EOU/2008/033 dt. 27/06/2008 and invoice No. RPIN/EOU/2008/037 dt. 30/06/2008 under which the services were provided in 2007 but billed in June 2008 and for which refund is claimed on 15.4.2009. There are conflicting decisions of Tribunal on the issue in different case; therefore, issue is referred to the President for consideration by the Larger Bench. Whether the relevant date for deciding the limiting period of one year under Clause 6 of Appendix to Notification 5/2006-CE(NT) dt. 14.3.2006 for sanction of refund of Cenvat Credit under Rule 5 of Cenvat Credit Rules read with Notification No. 5/2006-CE(NT) dt. 14.3.2006 in the case where service is exported is (a) The date of export of service, or (b) The date of export invoice, or (c) The data of receipt of foreign exchange whether is part of full or advanced Or (d) The date when both activities have been completed i.e. service has been exported and foreign exchange has been received (as foreign exchange may be received in advance).

Summary

Issues:
1. Interpretation of the time limit for sanction of refund under Explanation B(a) to Section 11B for exported services.
2. Applicability of Section 11B of the Central Excise Act to services under the Service Tax Act.
3. Determining the relevant date for limitation in refund claims under Rule 5 of the Cenvat Credit Rules.

Analysis:

1. The appeal was filed by Revenue against the order granting a refund to the respondents for the period from 1.4.2008 to 30.6.2008. The dispute revolved around the interpretation of the time limit for refund sanction under Explanation B(a) to Section 11B. The Commissioner (Appeals) upheld the refund, stating that the period for sanction of refund starts from the quarter of the month to which the refund claim pertains, not from the date of shipment of the exported goods. The Revenue contended that the limiting period should be calculated from the date of shipment. The Commissioner (Appeals) held that the refund was for credit accumulated, not for duty paid on the exported services, hence Rule 5 of Cenvat Credit Rules was deemed outside the purview of Section 11B.

2. The key question arose regarding the applicability of Section 11B of the Central Excise Act to services under the Service Tax Act. The Tribunal inferred that Section 83 of the Finance Act extends the provisions of Section 11B to service tax, treating it akin to a duty of excise. Therefore, the relevant date for limitation in the case of exported services would be the date on which the services are exported, aligning with the decisions in previous cases like M/s. Affinity Express India Pvt. Ltd. and GTN Engineering (I) Ltd.

3. The core issue to be decided was determining the relevant date for limitation in refund claims under Rule 5 of the Cenvat Credit Rules. The Tribunal held that the relevant date for exported services would be the date of export of services or the date when invoices are raised. However, to ensure uniformity in decisions, the matter was referred to a Larger Bench for consideration. The President was asked to decide whether the limiting period of one year for refund of Cenvat Credit under Rule 5 should be based on the date of export of service, date of export invoice, date of receipt of foreign exchange, or the completion of both activities.

This detailed analysis of the judgment provides insights into the legal interpretation and application of relevant provisions concerning refund claims for exported services under the Cenvat Credit Rules and Section 11B of the Central Excise Act.