2015 (6) TMI 268 - AT - Service Tax

Refund claim - Banking and other Financial Services - Partial sanction of rebate claim - Refund filed prior to date of raising invoice - Held that - Invoice which has been raised by the appellant on 30/06/2012 clearly indicates that the said invoice is for the services rendered by them to an entity situated in Mauritius. It is undisputed that the said services are exported and the appellant is eligible for the refund of the amount of service tax paid by them by debiting the amount in CENVAT credit account. It is noticed by us that the appellant had debited the CENVAT Credit register on 29/06/2012 indicating therein that the CENVAT credit is utilised for payment of service tax on services exported to Bain Capital Mauritius. In our considered view, when the facts are very clear and when there is export of services and the amounts have been debited in CENVAT credit register; there was no reason for the lower authorities to reject such a valid rebate claim. Only reason given by the first appellate authority for rejecting this claim was that it was filed on 29/06/2012, whereas the invoice was raised on 30/06/2012 and cannot be correlated. Invoice can be raised on any date but the debit of the amount towards service tax liability was on the date when the rebate claims were filed. On a specific query from the bench, as to the certificate of foreign inward remittance not tallying with the amount indicated in the ST-3 returns, the learned counsel would submit that he would file the invoices and the correct reconciliation. It was filed by the appellant on 16/01/2015. On perusal of the said reconciliation and the documents like FIRCs and the invoices raised by the appellant, we find that the entire amount, which has been billed by the appellant to Bain Capital Mauritius, has been received by them through banking channel. - Rejection of the rebate claim of the amount debited by the appellant in CENVAT credit register for the export of services is incorrect. The order to that extent is liable to be set aside and the rebate claims filed by the appellant needs to be allowed - Decided in favour of assessee.

Summary

Issues:
Refund claims under Rule 5 of the CENVAT Credit Rules, 2004 read with Notifications NO. 5/2006 and 11/2005-ST rejected on merits; rejection based on discrepancies in filing and timing of refund claims.

Detailed Analysis:

1. Background and Refund Claims Rejection:
The appellant, registered under "Banking and other Financial Services," filed refund claims under relevant notifications. The department rejected refund claims for various periods citing discrepancies communicated through show cause notices. The rejection was based on issues of law and merits.

2. Appeals to First Appellate Authority:
The appellant, aggrieved by the rejection, appealed to the first appellate authority, which upheld the rejection in the impugned order. Subsequently, the appellant appealed before the Tribunal, leading to the current appeal for the period April 2012 to June 2012.

3. Contentions of the Parties:
The appellant's senior advocate argued that the rejection was primarily due to filing the refund claim a day before the invoice date, which was raised for services exported to Mauritius. The appellant maintained that the service tax was paid from the CENVAT credit balance, and the rejection was unjustified.

4. Departmental Representative's Response:
The departmental representative contended that the appellant's foreign exchange receipts did not match billed amounts, and the ST-3 returns lacked clarity on advance payments received. The representative also highlighted discrepancies in the timing of the rebate claim and invoice issuance.

5. Tribunal's Consideration and Decision:
Upon reviewing the submissions and records, the Tribunal focused on the correctness of the refund claim for the period in question. The Tribunal found that the appellant's invoice clearly indicated service tax payment for exported services to Mauritius, debited in the CENVAT credit register. The rejection based on the timing of the claim and invoice issuance was deemed unjustified.

6. Conclusion and Tribunal's Decision:
The Tribunal set aside the rejection of the rebate claim, emphasizing that the appellant's actions were in compliance with the law. The order was deemed incorrect, and the rebate claims were allowed, providing consequential relief to the appellant. The decision was pronounced on 27.1.2015.

This detailed analysis highlights the legal journey of the case, focusing on the rejection of refund claims and the subsequent appeal process leading to the Tribunal's decision in favor of the appellant.