2016 (11) TMI 582 - AT - Service Tax

Rejection of refund claim - section 11B of the Central Excise Act, 1944 - time bar - Held that - the relevant date for the purpose of Section 11B for the purpose of Refund of accumulated Cenvat Credit is not the date when service is provided but the date on which payment for service provided is received in foreign exchange. As submitted by ld. Counsel for appellant and taking the date of foreign exchange receipt into consideration in both the appeals as relevant date both the claims for refund were filed within the period of limitation of one year. Therefore I hold that both the applications for refund of accumulated Cenvat credit filed on 9.5.2014 and 29.8.2014 are within the period of limitation - rejection of refund not justified - appeals allowed.

Summary

Issues:
Refund claim under Notification No. 27/2012-CE(NT) dated 18.6.2012 for Information Technology Software Services for different periods.

Analysis:
The appellant, a provider of taxable services, filed two refund claims under Notification No. 27/2012-CE(NT) for different quarters. The original authority allowed both claims, but the Revenue challenged them, arguing that the relevant date for refund under Section 11B of the Central Excise Act, 1944 should be the date of payment of duty. The Commissioner (Appeals) partially allowed the refunds, considering the date of export of service as the relevant date, leading to the appeals before the Tribunal.

The grounds of appeal included the contention that Section 11B does not specify the scenario of refund of accumulated Cenvat credit due to the export of output service where no service tax is payable within the taxable territory. The appellant relied on a previous Tribunal case and a High Court decision to support their argument.

The appellant's counsel argued that Section 11B of the Central Excise Act, 1944, applied for refund under Cenvat Credit Rules, 2004, through Notification No. 27/2012, lacks a specific relevant date for refund of Cenvat credit accumulated due to export without service tax payment in the taxable territory. Referring to previous cases, it was asserted that the date of receipt of foreign exchange for services provided to recipients outside India should be considered as the relevant date. The counsel highlighted that all refund claims were within the limitation period.

After considering the arguments, the Tribunal found that the relevant date for refund of accumulated Cenvat Credit is the date of receipt of payment in foreign exchange for services provided, not the date of service provision. Relying on previous case laws, the Tribunal concluded that the refund claims were within the limitation period as the dates of foreign exchange receipts were considered. Consequently, the Tribunal allowed both appeals, setting aside the Orders-in-Appeal and restoring the Orders-in-Original for the refund claims.

In conclusion, the Tribunal's decision clarified the relevant date for refund claims under Section 11B of the Central Excise Act, 1944, in cases of accumulated Cenvat credit due to service export without service tax payment in the taxable territory, emphasizing the date of receipt of payment in foreign exchange as the crucial factor for determining the limitation period for such claims.