2018 (2) TMI 1843 - CGOVT - Service Tax

Rebate claim - export of services - Rules 5 of Export of Services Rules, 2005 read with Notification No. 11/2005-S.T., dated 19-4-2005 - rebate rejected for the reason that for no foreign exchange against export of services is received in this case and in addition out of the rebate claim of ₹ 1,09,72,290/- claim of ₹ 52,57,641/- is also time-barred as per Section 11B of Central Excise Act, 1944 - Held that - The Government agrees with the views of the Assistant Commissioner and the Commissioner (Appeals) who have reached the conclusion that the Rule 3(2)(b) of Export of Services Rules, 2005 has not been satisfied in this case. Consequently it cannot be accepted that the applicant has exported service in this case as per Rule 3(2)(b) of the Export of Services Rules and accordingly the rebate of Service Tax is not admissible to the applicant under Notification No. 11/2005-S.T., dated 19-4-2005. The case laws relied upon by the applicant as mentioned in Para 2(c) are not found relevant in the present proceeding as in none of these decisions it has been held that receipt of payment in foreign currency in a bank situated in a foreign country can be considered as payment in foreign currency in India. Time Limitation - Held that - The applicant has conveniently overlooked the vital fact that Section 11B has been specially borrowed under Section 83 of the Finance Act and as a result time limitation of one year as stipulated under Section 11B of the Central Excise Act is applicable for the maintainability of the rebate of Service Tax under the Finance Act. Therefore, the lower authorities have rightly held rebate claim of ₹ 52,57,641/- as time-barred. The Government does not find any fault in the order of the Commissioner (Appeals) - the Revision Application is rejected.

Summary

Issues:
1. Claim of rebate for export of services rejected due to non-receipt of foreign exchange and time limitation.
2. Applicant's grounds for Revision Application based on receipt of convertible foreign exchange and non-applicability of Section 11B of Central Excise Act.

Analysis:
1. The applicant filed a rebate claim for export of services, which was rejected by the original adjudicating authority citing non-receipt of foreign exchange against the export of services and time limitation under Section 11B of the Central Excise Act. The Commissioner (Appeals) upheld the rejection. The applicant's Revision Application argued that convertible foreign exchange was indeed received in India, supported by the process involving a foreign bank and conversion to INR. However, the Government found that the payment for the exported service was received in Indian currency only, not in foreign currency, as per Rule 3(2)(b) of Export of Services Rules, 2005. The claim was deemed without basis, and the case laws cited were considered irrelevant as they did not support the applicant's position on foreign currency payment receipt.

2. Regarding the rejection based on time limitation for the rebate claim of a specific amount, the applicant contended that Section 11B of the Central Excise Act did not apply to Rule 5 of Export of Services Rules and Notification No. 11/2005-S.T. However, it was clarified that Section 11B was applicable by virtue of Section 83 of the Finance Act, imposing a one-year time limit. The lower authorities were justified in deeming the claim time-barred. The decisions cited by the applicant were deemed inapplicable as they did not address the specific application of time limitation under Section 11B for Service Tax rebates under the Finance Act.

In conclusion, the Government upheld the Commissioner (Appeals) decision, rejecting the Revision Application as no fault was found in the original order. The rejection was based on the non-receipt of foreign exchange as required by the Export of Services Rules and the applicability of the time limitation under Section 11B of the Central Excise Act for the rebate claim.