2016 (10) TMI 41 - AT - Service Tax

Refund claim - service tax paid on input service credit taken during the period October 2012 to December 2012 - denial of refund on renting of immovable property service on account of non-registration of the premises - Held that - in the case of KLA Tencor Software Private Limited Vs CST, Chennai 2016 (6) TMI 447 - CESTAT CHENNAI , it was held that registration is not a mandatory condition to avail refund under the Notifications prescribed by placing reliance on the ruling of mPortal Wireless Solutions Private Limited Vs CST, Bangalore 2011 (9) TMI 450 - KARNATAKA HIGH COURT . Therefore, the refund of CENVAT Credit on renting of immovable property is allowed, by following the ruling of Karnataka High Court. Refund claim - denial of refund claim on the ground of imitation of time - Held that - Commissioner (Appeals) dealt the limitation issue in depth and passed a detailed order and held that inasmuch as the refund is related to Cenvat credit taken during the given period and the same shall be taken till the last day of the given period, namely the quarter, the claim for refund can only be filed after the last date of the respective quarter and the relevant date is the date of export and are entitled in terms of Notification No. 27/2012 dated 18.06.2012 read with Section 11 B of CEA, 1944, and the refund claim is not hit by limitation. As per Rule 5 of CCR, 2004, in case of export of services, export is complete only when foreign exchange is received in India. This aspect has not been brought out by both the authorities below. Hence, the matter is remanded to the adjudicating authority with the direction to verify the date of receipt of foreign exchange received in India to determine the relevant date of export to decide the limitation aspect. - Appeal disposed of

Summary

Issues:
1. Refund claim rejection based on ineligible input services and limitation.
2. Rejection of refund claim on the ground of non-registration of premises.
3. Relevant date for determining limitation period.
4. Denial of refund on renting of immovable property service due to non-registration of premises.

Issue 1: Refund Claim Rejection based on Ineligible Input Services and Limitation:
The appellant, a service provider, filed a refund claim for service tax paid on input service credit. The Asst. Commissioner sanctioned a partial refund and rejected the balance amount citing ineligible input services and limitation. The Commissioner (Appeals) set aside part of the rejection. The appellant argued that the relevant date for the refund claim should be the date of invoice, not the date of export. The Tribunal noted that the relevant date for the limitation period is the date of receipt of foreign exchange, not the date of export. The matter was remanded to verify the date of receipt of foreign exchange for determining the limitation aspect.

Issue 2: Rejection of Refund Claim on Non-Registration of Premises:
The Tribunal referred to a High Court ruling stating that registration is not mandatory for claiming Cenvat credit. The appellant was allowed a refund even though they were not registered before a specific date. The Tribunal upheld that non-registration of premises cannot be a ground to reject a refund claim. The law was settled that registration is not a mandatory condition for availing refunds under specific notifications.

Issue 3: Relevant Date for Determining Limitation Period:
The Tribunal analyzed the limitation issue in depth. It held that the claim for refund related to Cenvat credit should be filed after the last day of the respective quarter, with the relevant date being the date of export. The Tribunal relied on specific case laws favoring the respondent assessee. The matter was remanded to verify the date of receipt of foreign exchange to decide the limitation aspect.

Issue 4: Denial of Refund on Renting of Immovable Property Service due to Non-Registration of Premises:
The Tribunal clarified that registration is not a mandatory condition to avail refunds under specific notifications. Refund of CENVAT Credit on renting of immovable property was allowed based on the ruling of the Karnataka High Court. The Tribunal rejected the Revenue's appeal regarding the denial of refund on renting of immovable property due to non-registration of premises.

In conclusion, the Tribunal remanded the appeal regarding limitation to the adjudicating authority and rejected the department's appeal regarding the denial of refund on account of non-registration. The appeal was disposed of accordingly, with the stay application also being disposed of.