2018 (12) TMI 555 - AT - Service Tax

Refund application - time limitation - Rule 5 of CCR read with N/N. 5/1006-CE NT - Held that - In the instant case, the service rendered by the respondent was completed only on 30th June, 2012. Moreover the amount received by them on 30th April, 2012 was by way of an advance. The said invoice related to period April to June, 2012. Hence the relevant date has to be taken only from the date of completion of service not from the date of receipt of payment which is prior to the date of completion of service. For one refund claim there cannot be more than one show cause notice and one adjudication order. It is not permitted to Revenue to reject the refund claim on one ground and when the said ground is held unsustainable, to raise the hue and cry that they are also other grounds on which the refund may be rejected. Appeal dismissed - decided against Revenue.

Summary

Issues:
1. Timeliness of the refund application filed by the respondent assessee.
2. Determination of the relevant date for the refund claim in the case of export of service.
3. Reliance on service agreement terms to decide the date of export.
4. Conditions for treating a service as an export of service.
5. Permissibility of rejecting a refund claim on multiple grounds.

Analysis:

Issue 1:
The primary issue in this appeal was whether the refund application filed by the respondent assessee on 26th-27th July, 2013, fell within the limitation period. The Revenue contended that the claim was time-barred as it was filed after one year from the relevant date, which they argued was the date of realization of export proceeds, i.e., 30th April, 2012.

Issue 2:
The Ld. Commissioner (Appeals) considered the service agreement between the respondent assessee and Shin Maywa Industries Ltd. Yokohama Japan, which specified that services for a quarter would be deemed executed in full on the last day of the quarter. Based on this clause and the context of the case, the Ld. Commissioner ruled that the refund claim filed on 26/27.06.2013 was within one year from the date the services were consummated, i.e., 30.06.2012, and hence, was filed on time.

Issue 3:
The Revenue challenged the reliance on the service agreement terms to determine the date of export, arguing that private agreements should not dictate the date of export. They contended that the relevant date for export of service should be based on the date of export or when the invoice is raised, as per a previous Tribunal ruling.

Issue 4:
The Tribunal held that for a service to be treated as an export of service, two conditions must be satisfied: services provided from India and received outside India, and payment received in India in convertible foreign exchange. In this case, the service was completed on 30th June, 2012, and the payment received on 30th April, 2012 was an advance for services rendered from April to June 2012. Therefore, the relevant date should be from the completion of service, not the receipt of payment.

Issue 5:
Regarding the permissibility of rejecting a refund claim on multiple grounds, the Tribunal emphasized that there should not be more than one show cause notice and one adjudication order for a single refund claim. Rejecting the Revenue's argument to consider other grounds for rejection, the Tribunal upheld the order-in-appeal and directed the adjudicating authority to grant the refund within 45 days from the date of the order, along with interest as per rules.