2019 (2) TMI 879 - AT - Service Tax

Refund of accumulated CENVAT credit - export of service as per Rule 6A of Service Tax Rules, 1994 - non-submission of declaration as required under N/N. 39/2012-ST dated 20.06.2012 - Held that - As found from the show-cause notice, appellant had made presented its claim in conformity to such procedure along with submission of documents, but it had not made a pre-declaration before the jurisdictional authority prior to the date of export, which appellant claims virtually to be imposable considering the nature of services provided by it i.e. data analysis, category of which is referred in the preceding paragraph. Para 3.4 of the said notification under sub-para (b) indicates that the jurisdictional authority, having regard to the declaration, if satisfied that the claim is in order, shall sanction the rebate either in whole or in part but it is quite confusing if the same notification indicates the filing of declaration before export or declaration under 3.4(a)(c) that such taxable services has been exported in terms of rule 3 of the said rules, along with documents evidencing such export - Further there is no stipulation in the notification that if the declaration prior to export is not made, then the same cannot be made in a future date or that departmental authority cannot call for the same in a subsequent day. Primary reason for grant of such rebate to the exporter is to encourage them for generation of foreign exchange for the country, where procedural requirement which is the handmade justice delivery, should not act as a stumbling block when such an irregularity of procedure is remediable. Rebate denied also on the ground of time limitation - Held that - Reliance placed in the case of Oceans Connect India Pvt. Ltd. Vs. Commissioner of Central Excise, Pune-III, 2016 (9) TMI 377 - CESTAT MUMBAI in which Rule 5 and Section 11B were being analysed, refund filed on or after the last date of quarter, since to be filed on quarterly basis, is to be taken within the period of one year, since under Section 11B it cannot start on any date before the end of the quarter, the same has to be reckoned from next date when quarter ends - without going into the intricacy of the issue as to if period of limitation can be invoked, if not cited in the show-cause as a ground for rejection of refund, there is no hesitation to hold a finding that appellant s refund claim was filed within the stipulated time. Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
Refusal to grant rebate on duty paid on excisable inputs and taxable input services for export of services.

Detailed Analysis:

Issue 1: Refusal to grant rebate on duty paid on excisable inputs and taxable input services for export of services.

Analysis: The appellant contested the refusal to grant rebate by the Commissioner (Appeals) for the duty paid on excisable inputs and taxable input services used for exporting services. The appellant argued that the procedural conditions, particularly the requirement of a declaration under Notification No. 39/2012-ST, should not impede the substantive concession of the rebate. The appellant highlighted the technical nature of the non-observance of procedural conditions and cited relevant case laws to support their argument. They emphasized that strict adherence to the notification's provisions was impractical given the nature of their data monitoring service, making it challenging to comply with the declaration requirements. The appellant also asserted that the Commissioner (Appeals) had erred in deeming the refund claim as time-barred, contending that the relevant date for refund calculation should be the date of remittance received in foreign exchange, not the export payment date, which was not explicitly covered in the notification.

Analysis Continued: The department's Authorized Representative supported the Commissioner (Appeals)'s decision to reject the refund claim, citing additional grounds for dismissal, such as the mismatch between the refund claim period and the availed CENVAT credit period. The department argued that the statutory one-year limitation for claiming a refund should not be circumvented, and any reference to it in the adjudication order was within the scope of the show-cause notice. After hearing both parties and examining the case record, the Tribunal noted that the appellant, as an exporter of services, was entitled to a rebate on duty paid on inputs and input services under Notification No. 39/2012-ST. The Tribunal observed that the procedural requirements, including the pre-declaration condition, should not hinder the rebate process, especially when such irregularities are rectifiable. The Tribunal also addressed the time-bar issue, relying on precedents to establish that the appellant's refund claim was filed within the stipulated time frame, considering the date of foreign exchange remittance and relevant case laws on the limitation period for refunds.

Conclusion: The Tribunal allowed the appeal, setting aside the Commissioner of GST & CX (Appeals-III), Mumbai's order that refused the appellant's refund claim. The Tribunal directed the respondent-department to process the necessary refund, including applicable interest, within three months upon receipt of the order, emphasizing the importance of encouraging exporters and facilitating the refund process in a timely manner.