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2019 (5) TMI 380 - AT - Service TaxRefund of accumulated input tax credit - export of services - Benefit of N/N. 14/2016-C.E.(N.T.) dated 01.03.2016 - effect of notification whether retrospective or prospective? - HELD THAT - Rule 5 of the Cenvat Credit Rules 2004 permits the service provider for claim of refund of service tax paid on the input services used/utilized for exportation of the output service. In exercise of the powers conferred in the said statutory provisions the Central Government had issued the Notification No. 27/2012-C.E.(N.T.) dated 18.06.2012 prescribing the procedure safeguards and limitations for allowing the Cenvat benefit. The said notification vide paragraph 3(b) has prescribed that the application in prescribed form shall be filed by the claimant before expiry of the period specified in Section 11B of the Central Excise Act 1944. The said statute has provided for a time limit of one year from the relevant date for lodgement of the refund claim application. Relevant date prescribed therein is in context with situations envisaged under the Central Excise statute concerning the excisable goods. The issue with regard to the relevant date for consideration of refund of service tax on export of service was also considered by the Hon ble Andhra Pradesh High Court in the case of Hyundai Motors (I) Engineering (P) Ltd. 2016 (7) TMI 1346 - ANDHRA PRADESH HIGH COURT holding that the period of limitation of one year should be computed from the date of FIRC. With regard to the submissions of Revenue that the Notification No. 14/2016-C.E. (N.T.) is prospective in nature and the benefit provided there-under is not applicable to the claims filed prior to such date it is the settle principle of law that the beneficial amendment to the statute should be given effect to retrospectively. Denial of the refund benefit of service tax paid on Real Estate Agent Service - HELD THAT - Such service was used by the respondent for obtaining office premises for rendering the output service which were exported by them. Since nexus between the input and output services were established such disputed service should qualify as input service for the purpose of taking of Cenvat Credit and subsequent refund thereof. Further the correctness of availment of Cenvat Credit at the stage of filing of refund claim cannot be questioned since the statute deals with the situation differently. Rebate claim - time limitation - Notification No. 11/2005-ST dated 19.04.2005 - HELD THAT - It is an admitted fact on record that the respondent had complied with the conditions and the procedures laid down under the said notification - With regard to the period of limitation for filing of rebate claim the issue is no longer res integra in view of Larger Bench decision in the case of Span Infotech (India) Pvt. Ltd. 2018 (2) TMI 946 - CESTAT BANGALORE . Though the judgment was delivered in context with refund of service tax under Notification No. 27/2012-C.E.(N.T.) dated 18.06.2012 but the concept of relevant date considered therein should equally be applicable to the case of rebate claims. Rebate claim - input service - works contract service used by them for repair and maintenance of UPS system PAC units and air conditioners installed within the office premises and used in providing the exported output service - HELD THAT - In the present case since the services were used for the purpose of maintenance and repair of UPS systems and air conditioners and not for construction of any civil structure such works contract service in our considered view should merit consideration as input service for the purpose of the benefit of refund/rebate claim. Appeal dismissed - decided against Revenue.
Issues Involved:
1. Eligibility for rebate of service tax on exported services. 2. Refund of accumulated input tax credit under Rule 5 of the Cenvat Credit Rules, 2004. 3. Limitation period for filing rebate and refund claims. 4. Eligibility of Cenvat Credit for Real Estate Agent Service and Works Contract Service. 5. Consideration of foreign exchange fluctuations in rebate claims. Detailed Analysis: 1. Eligibility for Rebate of Service Tax on Exported Services: The Tribunal examined whether the respondent was entitled to a rebate of service tax paid on exported services. The Commissioner (Appeals) had allowed the rebate claims, stating that they were filed within one year from the date of receipt of consideration in foreign exchange. The Tribunal upheld this decision, confirming that the rebate claims complied with Notification No. 11/2005-ST dated 19.04.2005, which mandates receipt of payment in convertible foreign exchange. The Tribunal also referenced the Larger Bench decision in Span Infotech (India) Pvt. Ltd. and the Andhra Pradesh High Court judgment in Hyundai Motors India Engineering Pvt. Ltd., which supported the respondent's position. 2. Refund of Accumulated Input Tax Credit under Rule 5 of the Cenvat Credit Rules, 2004: The respondent had filed refund applications under Rule 5 of the Cenvat Credit Rules, 2004, read with Notification No. 27/2012-C.E.(N.T.) dated 18.06.2012. The Commissioner (Appeals) allowed these refunds, and the Tribunal upheld this decision. The Tribunal noted that Rule 5 permits the refund of service tax paid on input services used for exporting output services. The Tribunal also dismissed the Revenue's contention that Notification No. 14/2016-C.E.(N.T.) dated 01.03.2016, which clarified the relevant date for filing refund claims, should not be applied retrospectively. 3. Limitation Period for Filing Rebate and Refund Claims: The Tribunal addressed the issue of the limitation period for filing rebate and refund claims. It referenced the Larger Bench decision in Span Infotech (India) Pvt. Ltd., which concluded that the relevant date for filing refund claims should be the end of the quarter in which the FIRC is received. The Tribunal also cited the Andhra Pradesh High Court judgment in Hyundai Motors India Engineering Pvt. Ltd., which supported this interpretation. The Tribunal dismissed the Revenue's appeals on this ground, affirming that the claims were filed within the prescribed limitation period. 4. Eligibility of Cenvat Credit for Real Estate Agent Service and Works Contract Service: The Tribunal examined whether the respondent was eligible for Cenvat Credit on Real Estate Agent Service and Works Contract Service. It found that the Real Estate Agent Service was used for obtaining office premises for rendering exported services, establishing a nexus between input and output services. Therefore, it qualified as an input service for Cenvat Credit. Regarding Works Contract Service, the Tribunal noted that it was used for the repair and maintenance of UPS systems and air conditioners, not for construction. Thus, it also qualified as an input service for refund/rebate purposes. 5. Consideration of Foreign Exchange Fluctuations in Rebate Claims: The Tribunal considered the issue of foreign exchange fluctuations in rebate claims. It found that the respondent had received the entire consideration as expressed in foreign currency in the invoices, and any differences were due to forex rate fluctuations. This was an internal accounting entry and did not constitute a short receipt of consideration. The Tribunal upheld the respondent's eligibility for rebate claims where FIRCs were issued, showing receipt in INR, as recognized by FEMA Regulations and supported by previous Tribunal decisions. Conclusion: The Tribunal dismissed all 20 appeals filed by the Revenue, affirming the decisions of the Commissioner (Appeals) on all issues. The Tribunal found that the rebate and refund claims were filed within the limitation period, the respondent was eligible for Cenvat Credit on Real Estate Agent Service and Works Contract Service, and the foreign exchange fluctuations did not affect the rebate claims. The Tribunal's decision was pronounced in the open court on 03/05/2019.
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