2016 (9) TMI 288 - AT - Service Tax

Rejection of refund claim time bar CENVAT credit - input service - export of business auxiliary services Held that - in as much as the refund is related to Cenvat credit taken during the given period and the same shall be taken till the last day of the given period, namely the quarter, the claim for refund can only be filed after the last date of the respective quarter and the relevant date is the date of export and are entitled in terms of Notification No. 27/12 dated 18.06.2012 read with Section 11 B of CEA, 1944, and the refund claim is not hit by limitation - in case of export of services, export is complete only when foreign exchange is received in India, this matter was not considered and requires consideration matter remanded with the direction to verify the date of receipt of foreign exchange received in India to determine the relevant date of export to decide the limitation aspect appeal disposed off.

Summary

Issues:
Refund claim rejection on grounds of limitation and ineligible input services.

Analysis:
The case involved a refund claim by a service provider for service tax paid on input service credit during a specific period. The Asst. Commissioner of Service Tax partially sanctioned the refund and rejected the balance amount, citing ineligible input services and limitation. The Commissioner (Appeals) set aside the rejection of the refund claim as time-barred, leading to the Revenue's appeal before the Tribunal.

The appellant argued that the Commissioner (Appeals) erred in setting aside the rejection of the refund claim as time-barred. The appellant contended that the relevant date for the refund claim should be the last day of the quarter for which the refund is claimed, not the date of export. The appellant emphasized that the date of the invoice should be considered, and the provisions of Section 11B should not be overridden by other conditions.

On the other hand, the respondent argued that the relevant date for determining the limitation period is the date of receipt of convertible foreign exchange in the exporter's bank account. The respondent relied on precedents where it was held that the date of receipt of foreign exchange is crucial in such cases. The respondent suggested remanding the matter to verify the date of receipt of foreign exchange to determine if it falls within the limitation period.

The Tribunal observed discrepancies in the decisions of the authorities below regarding the limitation issue. The Commissioner (Appeals) held that the refund claim related to Cenvat credit should be filed after the last day of the respective quarter, considering the date of export as the relevant date. The Tribunal agreed with the respondent's argument, citing relevant case laws and statutory provisions. It emphasized that in cases of export of services, the export is complete only upon the receipt of foreign exchange in India. The Tribunal remanded the matter to the adjudicating authority to ascertain the date of receipt of foreign exchange to determine the relevant date of export for deciding the limitation aspect.

Conclusively, the Tribunal allowed the appeal by way of remand, directing further verification of the date of receipt of foreign exchange. The cross-objection filed by the respondent was also disposed of in the same terms.