2015 (10) TMI 517 - AT - Service Tax

Correctness of quantum of refund granted under Rule 5 of the CENVAT Credit Rules, 2004 Appeal filed by the Revenue - Revenue disputes on the quantum of refund claimed which has been sanctioned to the appellant including the amount which is not due to them Held That - 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 - There is no infirmity or illegality in the Order-in-Appeal which has set aside the Order-in-Original and the impugned order is correct and legal Appeal of the Revenue rejected Decided in favour of the assessee.

Summary

Issues:
Revenue's appeal against the Order-in-Appeal allowing appellant's refund claim.

Analysis:
The appeal was filed by the revenue challenging the Order-in-Appeal that allowed the appellant's refund claim of Rs. 13,85,401. The first appellate authority set aside the impugned order, leading to the revenue's grievance. The dispute centered around the quantum of the refund claim sanctioned to the appellant based on the interpretation of Rule 5 of the CENVAT Credit Rules, 2004 by the Revenue authorities. The Revenue contended that the appellant had been granted an additional refund not due to them. The appellant claimed that certain invoices from 2011-12 were processed for refund in 2012-13, leading to the dispute. The Revenue aimed to exclude these invoices from the export turnover but include the Cenvat Credit in the total turnover of export goods, a view contested by the appellant and supported by the first appellate authority.

The first appellate authority correctly interpreted the relevant provisions, emphasizing that the new Rule 5 of the CCR applied to exports made after April 1, 2012, with the receipt of payment being immaterial for the purpose of refund eligibility. The authority clarified that for exports completed before March 31, 2012, the old Rule 5 applied, while for exports after April 1, 2012, the new Rule 5 was applicable. The authority found that the appellant included invoices dated March 30, 2012, in the refund claim, which were issued before April 1, 2012, and thus subject to the old rule. As the appellant had exported their entire turnover without providing services to the Domestic Tariff Area in the relevant period, the export turnover equaled the total turnover, affecting the refund calculation.

The first appellate authority recalculated the refund amount, determining that the appellant was entitled to a further refund of Rs. 13,85,401, after considering the already granted refund. The authority found no infirmity in setting aside the Order-in-Original and dismissed the revenue's appeal. Additionally, the objection raised regarding the limitation period for filing the refund claim was dismissed, citing precedent supporting the appellant's timely filing based on foreign exchange receipt. The authority concluded that the impugned order was legally sound and rejected the revenue's appeal while disposing of the appellant's cross objection.