2015 (12) TMI 414 - AT - Service Tax

Denial of refund claim - accumulated Cenvat credit against export of Services in terms of Rule 5 of CCR, 2004 and Notification No.5/2006 CE (N.T.) - Bar of limitation - Held that - It is clear that payment received in Indian Rupees for which FIRC issued by the bank and payment is routed through foreign bank qualifies the condition of payment convertible foreign exchange , therefore on this ground refund cannot be rejected. As regard Cenvat Credit in respect of services namely, rent a cab, outdoor caterer s service, I fully agree with the findings of the Ld. Commissioner based on board circular dated 19/1/2010. Moreover on these two services there are number of judgment of this Tribunal including larger bench judgment in case of Commissioner of Central Excise, Mumbai-V vs. GTC Industries Ltd. 2008 (9) TMI 56 - CESTAT MUMBAI where credit was held admissible. - Commissioner (Appeals) order is just and proper except in respect of two invoices No. 10/2009 dated 31/10/2009 and 11/2009 dated 31/11/2009. I therefore hold that respondent is not entitle for the refund in respect of two invoices. - Decided partly in favour of Revenue.

Issues Involved:
1. Refund claim of accumulated Cenvat credit against export of services.
2. Time-bar on the refund claim.
3. Receipt of foreign remittance in Indian Rupees.
4. Admissibility of Cenvat credit for certain services (rent a cab service, outdoor catering service).

Detailed Analysis:

1. Refund Claim of Accumulated Cenvat Credit Against Export of Services:
The appellant sought a refund of accumulated Cenvat credit under Rule 5 of the CCR, 2004, and Notification No. 5/2006 CE (N.T.) dated 14/3/2006. The Original Authority rejected the refund claim on the grounds of time-bar, receipt of remittance in Indian Rupees, and inadmissibility of certain services as input services. The Commissioner (Appeals) overturned this decision, allowing the refund claim, stating that the claim was filed within one year from the realization of proceeds against export services. The Tribunal upheld the Commissioner (Appeals)'s decision except for two specific invoices.

2. Time-Bar on the Refund Claim:
The Original Authority rejected the refund claim as time-barred, as it was filed beyond the period of one year. The Commissioner (Appeals) found that the refund claim was filed within one year from the realization of proceeds against export services, except for two invoices. The Tribunal agreed, noting that only the refund claims related to invoices No. 10/2009 dated 31/10/2009 and 11/2009 dated 31/11/2009 were not admissible due to being filed beyond the period of one year. The remaining claims were within the prescribed time limit and thus admissible.

3. Receipt of Foreign Remittance in Indian Rupees:
The Original Authority contended that the receipt of remittance in Indian Rupees does not qualify as convertible foreign exchange under the Export of Service Rules, 2005. The Commissioner (Appeals) found that the remittance was routed through a foreign bank (Wachovia Bank N.A., USA) and certified by the HDFC Bank as convertible foreign exchange. The Tribunal supported this view, citing previous decisions, including Sun-Area Real Estate Pvt Ltd vs. Commissioner of Service Tax, Mumbai-I, which established that Indian Rupees received through a foreign bank qualifies as convertible foreign exchange.

4. Admissibility of Cenvat Credit for Certain Services:
The Original Authority rejected the refund of service tax on rent a cab service and outdoor catering service, deeming them not input services. The Commissioner (Appeals) referred to Circular No. 120/01/2010 ST dated 19/1/2010, which states that essential services used by BPO/Call centers qualify as input services. The Tribunal agreed, referencing multiple judgments, including the larger bench judgment in Commissioner of Central Excise, Mumbai-V vs. GTC Industries Ltd., which held such credits as admissible. The Tribunal thus upheld the admissibility of Cenvat credit for these services.

Conclusion:
The Tribunal concluded that the Commissioner (Appeals)'s order was just and proper except for the refund claims related to two specific invoices. The refund claims for these invoices were denied due to time-bar, but the remaining claims were allowed. The Tribunal also confirmed that remittances received in Indian Rupees through foreign banks qualify as convertible foreign exchange and that Cenvat credit for rent a cab and outdoor catering services is admissible. The Revenue's appeal was partly allowed in these terms.

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