2015 (11) TMI 975 - AT - Service Tax

Denial of refund claim - export of software services or export of goods - refund claim denied on the ground that appellant has exported the goods and not the services - period of limitation - eligible input services - Held that - With respect to denial of refund claim on embroidery software service, I find that it is evident from the agreement produced before me that the said activity is in the nature of service. Further, actual export of underlying service and receipt of foreign exchange is not in dispute. Also for the past period the assessee has been carrying out the same activity and was accepted by the Department as service. In view of the above, merely because the assessee has inadvertently indicated the said turnover in the return against the column for final product instead of output service, that will not dis-entitle them for the refund. With regard to denial of refund on account of challenge to eligibility of certain input services, I find that these input services are essential and are in fact used for provision of output services by the Appellant. I also find that when the assessee claimed cenvat credit on these input services, the same was not challenged. It is settled principle, that there cannot be different yardsticks in allowing the credit and granting the refund. In view of this, I hold that the Appellant has rightly claimed refund of cenvat credit availed on these input services - Decided in favour of assessee.

Summary

Issues:
1. Time-barred refund claim under Rule 5 of CENVAT Credit Rules, 2004.
2. Restriction of refund claim related to Embroidery Software Development.
3. Challenge to certain input services for refund eligibility.

Analysis:

1. Time-barred refund claim under Rule 5 of CENVAT Credit Rules, 2004:
The Appellant filed a refund claim under Rule 5 of the CENVAT Credit Rules, seeking a refund of accumulated credit for services exported. The dispute arose regarding the time limit for filing such a claim. The Appellant argued that there should be no time limit for such claims, citing various case laws to support this contention. The Tribunal agreed with the Appellant, stating that no specific date could be ascribed for the limitation period under Section 11B of the Central Excise Act. Referring to previous decisions, the Tribunal held that no time limit applies to refund claims under Rule 5 of the CENVAT Credit Rules.

2. Restriction of refund claim related to Embroidery Software Development:
The Appellant's refund claim was partially rejected due to an issue related to the disclosure of embroidery software development service as a final product instead of an output service. The Appellant argued that the nature of the activity was a service, not a product, and thus should not affect their refund eligibility. The Tribunal examined the agreement and found that the activity indeed constituted a service. Despite the misrepresentation in the return, the Tribunal ruled in favor of the Appellant, stating that the actual export of the service and receipt of foreign exchange were not in dispute, thereby entitling the Appellant to the refund.

3. Challenge to certain input services for refund eligibility:
The Appellant's refund claim was further contested regarding the eligibility of certain input services, including transport services, Xerox charges, courier charges, and meal coupons. The Revenue argued against the refund on these grounds, but the Appellant contended that these services were essential for providing their output services. The Tribunal agreed with the Appellant, stating that the input services were indeed used for the output services and that the Appellant had the right to claim the refund on the cenvat credit availed for these services. The Tribunal emphasized the principle of consistency in allowing credit and granting refunds, ultimately ruling in favor of the Appellant.

In conclusion, the Tribunal allowed the appeal, providing consequential relief to the Appellant based on the findings related to the time-barred refund claim, the issue with the embroidery software development service, and the eligibility of certain input services for refund.