2016 (3) TMI 1049 - AT - Service Tax

Application of time-limit of Section 11B of Service Tax Act, 1994 - Rejection of refund claim of Cenvat Credit lying unutilized during the July to September, 2012 - Rule 5 of Cenvat Credit rules 2004 (CCR) read with notification no. 27/2012-CE (NT) - Export of Consulting Engineering Services to their customers situated outside India - Appellant exported entire services and in order to render said services taken the credit of service tax paid on input services and eligible for refund of the Cenvat Credit which remains unutilized - Held that - as regards the application of time limit, of section 11B to the entire issue, the question of application of section 11B would not arise, as in the case, the refund of amount of Cenvat Credit availed on various input services is clearly covered by rule 5 of CCR, which lays down the time limit for filing of the refund claim i.e. within one year from the end of quarter during which services were exported. Therefore, the finding recorded by the first appellate authority on this point is correct and does not require any in curtains. - Decided against the revenue

Summary

Issues involved:
1. Refund of Cenvat Credit under Cenvat Credit rules 2004.
2. Interpretation of export turnover of services.
3. Application of section 11B of the Central Excise Act, 1944 to refund claims.
4. Compliance with rules 5 and 6A of the Central Excise rules.

Issue 1: Refund of Cenvat Credit under Cenvat Credit rules 2004:
The appeal was filed by the Revenue against the rejection of a refund claim of &8377; 27,85,000 while an amount of &8377; 50,33,083 was sanctioned. The first appellate authority further allowed a refund claim of &8377; 29,79,038. The Revenue contended that the claim was filed beyond the time limit under section 11B of the Central Excise Act, 1944, and hence, should be denied. The respondent, on the other hand, argued that the claim was filed within the prescribed period and provided necessary documents for the refund claim.

Issue 2: Interpretation of export turnover of services:
The main issue revolved around the interpretation of the export turnover of services. The first appellate authority correctly understood the components to be included in the export turnover of services as per the Cenvat Credit rules. The authority considered the payments received during the relevant quarter for exported services, payments received for services already exported, and services for which advance payment was received. The authority also highlighted the exclusion of services with advance payments but not yet provided. The judgment cited relevant rules and notifications to support the calculation of export turnover of services.

Issue 3: Application of section 11B of the Central Excise Act, 1944 to refund claims:
The Revenue argued that the refund claim was beyond the time limit prescribed under section 11B of the Central Excise Act, 1944, and should be denied. However, the first appellate authority correctly applied rule 5 of the Cenvat Credit rules, which specifies the time limit for filing refund claims. The authority found that the refund claim was within the stipulated period and did not require the application of section 11B. The judgment emphasized that the refund of Cenvat Credit availed on input services for export of services falls under rule 5 of the CCR, not section 11B.

Issue 4: Compliance with rules 5 and 6A of the Central Excise rules:
The consultant for the respondent highlighted compliance with rules 5 and 6A of the Central Excise rules. The judgment referred to the case law of Bechtel India Pvt. Ltd. to support the argument that section 11B of the Central Excise Act, 1944, was not applicable in this scenario. The first appellate authority's decision to allow the refund claim was based on a thorough analysis of the export turnover of services and compliance with the relevant rules. The judgment concluded that the authority's findings were correct and legally sound, requiring no interference.

In conclusion, the appellate tribunal upheld the first appellate authority's decision to allow the refund claim of the respondent assessee, emphasizing compliance with the Cenvat Credit rules and proper interpretation of the export turnover of services. The judgment clarified the application of section 11B to refund claims and highlighted the importance of adhering to the prescribed time limits under the Central Excise Act.