2018 (1) TMI 166 - AT - Service Tax

Refund of unutilized CENVAT credit - time limitation within one year of the raising of the invoices for export services or otherwise? - Held that - the refund claims which are filed within one year from the date of the FIRCs needs to the appellant - appeal allowed. CENVAT credit - various input services - whether CENVAT credit availed by the appellants on various services are right or otherwise? - Held that - All the above services were received by the appellant in their premises is not disputed. We find that there is no dispute as to the fact that appellant had exported all their services and it is settled law if there is export of services, refund of the tax paid on input services needs to be allowed - appeal allowed. Whether the First Appellate Authority was correct in remanding the matter as regards the issue of classification is correct or otherwise? - Held that - there is no necessity to remand the matter back as the classification of the services. We find that even if it is in any of the services i.e. BAS, MCS, BSS the fact being the services are exported being not disputed appellants are eligible for the refund of the service tax paid on various input services. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Limitation period for filing refund claims of unutilized CENVAT credit
2. Validity of CENVAT credit availed on various services
3. Correctness of remanding the matter on the issue of classification

Analysis:
1. Limitation period for filing refund claims: The appeals revolved around whether the refund claims of unutilized CENVAT credit should be filed within one year of raising invoices for export services. The lower authorities had rejected the refund claims as time-barred. However, the Tribunal referred to a decision by the High Court of Andhra Pradesh, stating that claims filed within one year from the date of Foreign Inward Remission Certificate (FIRCs) should be considered within the limitation period. The Tribunal held in favor of the appellant, emphasizing that the refund claims filed within one year from the FIRCs date should be allowed, contrary to the lower authorities' view.

2. Validity of CENVAT credit on various services: The appellant had availed CENVAT credit on input services like courier services, security agency services, and others. The Tribunal noted that the appellant had exported all services and received various input services in their premises. Citing legal precedents, including a decision by the High Court of Karnataka, the Tribunal affirmed that if there is an export of services, the refund of tax paid on input services should be permitted. The Tribunal upheld the appellant's right to claim CENVAT credit on the mentioned services.

3. Remanding the matter on the issue of classification: The First Appellate Authority had remanded the matter regarding the classification of services back to the Adjudicating Authority. However, the Tribunal found no need for such remand as the services were exported, making the appellant eligible for a refund of service tax paid on input services. The Tribunal concluded that regardless of the service classification, since the services were exported, the appellant was entitled to the refund. Consequently, the Tribunal set aside the impugned orders and allowed the appeals in favor of the appellant.

In conclusion, the judgment addressed the issues of limitation period for refund claims, validity of CENVAT credit on various services, and the remanding of the matter on service classification. The Tribunal ruled in favor of the appellant, emphasizing the importance of timely filing of refund claims within the specified period and the eligibility of the appellant for CENVAT credit on input services due to the export of services.