2018 (9) TMI 919 - AT - Service Tax

Refund of accumulated Cenvat credit - refund rejected on the ground that the appellant failed to submit documentary evidence for export of services in the form of Softex Forms - Rule 5 of Cenvat Credit Rules - Held that - The refund under Rule 5 of the Cenvat Credit Rules, 2004 may be granted by the departmental authorities subject to fulfillment of the conditions and safeguards prescribed in the Notification No. 27/2012-CE (NT). The conditions and safeguards have been prescribed to ensure that the services have been duly exported and payment for the same has been received in foreign exchange. Documentary evidences as prescribed under notification are required to be submitted to satisfy the requirements. The Tribunal in the case of Mobile Iron India Software Pvt. Ltd. Vs. CCE, Hyderabad 2017 (4) TMI 228 - CESTAT HYDERABAD , has concluded that the insistence to furnish Softex returns from STP authorities is not as per the law laid down in the relevant field - In the present case also, the appellant has claimed to have exported Information Technology Software Service. The fact of export of such software and the receipt of the foreign exchange therefore is sufficiently evidenced from the invoices, the FIRCs and the Chartered Accountant s certificate certifying the total turnover. Refund allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
Refund claim rejection due to non-submission of Softex Forms for export of services.

Detailed Analysis:
The appellant, a subsidiary of a US company, provided product development support services and claimed a refund for accumulated Cenvat credit for the period April to September 2016. The dispute arose as the authorities rejected the refund claim citing the absence of Softex Forms, a requirement for offshore export of services through data communication link as per RBI guidelines. The appellant argued that all other necessary documents were submitted, and the requirement of Softex Forms does not apply to software exports, citing a Tribunal case precedent.

The appellant's advocate emphasized that the rejection was solely based on the absence of Softex Forms, while all other supporting documents were duly provided. He contended that the appellant met all conditions for the refund as per relevant notifications and rules. The Departmental Representative argued that satisfaction regarding service export and foreign exchange receipt is crucial for refund approval, highlighting the non-submission of required documentary evidence for export as the reason for rejection.

The Tribunal analyzed the case, considering the appellant's argument that Softex Forms were not mandatory for software service exports. Referring to relevant regulations, the Tribunal concluded that the insistence on Softex Forms from STPI authorities was not legally mandated for service exports. The Tribunal found sufficient evidence of software service export and foreign exchange receipt through submitted invoices, FIRCs, and a Chartered Accountant's certificate. Consequently, the Tribunal ruled in favor of the appellant, allowing the refund claim under Rule 5 of Cenvat Credit Rules, setting aside the impugned order.

In summary, the judgment addressed the rejection of a refund claim based on the non-submission of Softex Forms for service exports, emphasizing the legal requirements, documentary evidence, and precedents to support the appellant's entitlement to the refund under relevant rules and notifications.