2015 (6) TMI 749 - AT - Service Tax

Denial of refund claim - Bar of limitation - Held that - Following the ruling of the Division Bench of this Tribunal in the case of KPIT Cummins Infosystems Ltd. (2013 (7) TMI 124 (CESTAT-Mum)),and Hon ble M.P. High Court in STI India Ltd. (2008 (10) TMI 246 - HIGH COURT OF MADHYA PRADESH AT INDORE), I hold that limitation will not apply for claim of refund of CENVAT Credit in case of export of service in terms of Section 11B of the Central Excise Act read with Rule 5 of the Cenvat Credit Rules. Further, it is held that the relevant date, if any, for the purpose of Section 11B for refund of CENVAT Credit in case of export of service will be one year from the date of receipt of remittance for the services rendered to the recipient of service outside India. - The adjudicating authority is directed to grant refund other than or rejected amount for non-production of input invoices - Decided in favour of assessee.

Issues:
1. Disallowance of refund claim under Rule 5 of the Cenvat Credit Rules, 2004 on the ground of limitation.
2. Applicability of limitation for refund of CENVAT Credit on account of export.
3. Interpretation of relevant date for export of service for claiming refund.
4. Analysis of Rule 5 of the Cenvat Credit Rules in relation to refund claims.
5. Comparison of rulings by different High Courts on limitation for refund claims.
6. Arguments regarding the relevant date for computing limitation for refund claims.
7. Decision on the appeals and granting of consequential relief.

Issue 1: Disallowance of refund claim under Rule 5 of the Cenvat Credit Rules, 2004 on the ground of limitation:
The appellant, M/s Clearpoint Learning Systems (India) Pvt. Ltd., filed appeals against Orders-in-Appeal disallowing refund claims under Rule 5 of the Cenvat Credit Rules on the basis of limitation. The disallowance was upheld by the Commissioner of Central Excise & Service Tax (Appeals), Pune-III, citing the relevant date for limitation as one year from the date of export of service. The appeals were dismissed, leading to the appellant approaching the Tribunal.

Issue 2: Applicability of limitation for refund of CENVAT Credit on account of export:
The appellant argued that no limitation should apply to the refund of CENVAT Credit on account of export, citing a ruling by the Hon'ble Karnataka High Court. They contended that the bar of limitation cannot be a ground to refuse refund in such cases, emphasizing that export of service is complete upon service exportation from India and receipt of foreign exchange. The Tribunal, following previous judgments, held that limitation does not apply to export of service for claiming CENVAT Credit refunds.

Issue 3: Interpretation of relevant date for export of service for claiming refund:
The appellant challenged the Revenue's interpretation of the relevant date for export of service, arguing that it should be the date of receipt of foreign exchange in India, not the invoice date. They emphasized that the completion of the export transaction as per rules is essential for refund claims. The Tribunal agreed with the appellant's interpretation, stating that the relevant date for refund claims in export of service cases is one year from the date of remittance for services rendered outside India.

Issue 4: Analysis of Rule 5 of the Cenvat Credit Rules in relation to refund claims:
The appellant relied on Rule 5 of the Cenvat Credit Rules, highlighting that refunds are allowed where adjustment of input credit is not possible due to the nature of the business. They argued that no time limit is prescribed under Rule 5, supporting their claim for refunds. The Tribunal considered this argument in conjunction with other legal interpretations to rule in favor of the appellant.

Issue 5: Comparison of rulings by different High Courts on limitation for refund claims:
The appellant and the Revenue presented contrasting rulings by different High Courts regarding the limitation for refund claims. While the appellant cited judgments supporting their position that limitation does not apply to export of service cases, the Revenue referred to a Madras High Court ruling that applied limitations to CENVAT Credit refunds. The Tribunal considered these arguments but ultimately followed precedents favoring the appellant's stance.

Issue 6: Arguments regarding the relevant date for computing limitation for refund claims:
Both parties presented arguments regarding the determination of the relevant date for computing limitations on refund claims. The appellant emphasized the date of receipt of remittance for services rendered outside India, while the Revenue referred to rules governing export of goods. The Tribunal sided with the appellant's interpretation, directing the adjudicating authority to grant refunds accordingly.

Issue 7: Decision on the appeals and granting of consequential relief:
After considering the arguments and legal precedents, the Tribunal allowed the appeals filed by the appellant and directed the adjudicating authority to grant refunds, excluding the rejected amount for non-production of input invoices. The decision was based on the understanding that limitation does not apply to refund claims for CENVAT Credit in cases of export of service, aligning with previous judgments and legal interpretations.

This detailed analysis of the judgment provides a comprehensive overview of the issues involved and the Tribunal's decision on each aspect of the case.

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