2018 (2) TMI 1040 - AT - Service Tax

Refund claim - time limitation - N/N. 14/2016-CE (NT) dated 01/03/2016 - Rule 5 read with N/N. 27/2012-CE (NT) dated 18/06/2012 - Held that - the period of one year, in case of export of service, shall be reckoned from the date of receipt of foreign exchange and not from any other date - In the admitted fact of this case, the refund claims were filed within one year from the date of receipt of foreign exchange. Therefore, irrespective of whether the amendment provision was brought from 01/03/2016, the refund claim filed by the respondent is well within the period specified under Section 11B - the refund is not time barred. The issue is covered by the judgement of this Tribunal in the case of Bechtel India Pvt. Ltd. 2013 (7) TMI 490 - CESTAT NEW DELHI , where it was held that In case of export of Services, export is complete only when foreign exchange is received in India. Relevant date of export of services is date of receipt of foreign exchange. Refund allowed - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Whether the refund claim filed under Rule 5 of Cenvat Credit Rules 2004 is time-barred.

Analysis:
The Revenue challenged the order of the Commissioner (Appeals) regarding the timing of the refund claim filed by the respondent. The department argued that the period for filing the refund should be calculated from the date of the invoice for the service exported, as per the un-amended provision of Notification No.27/2012-CE(NT). However, the Commissioner (Appeals) held that the refund claim was not time-barred based on the amendment in Notification No.14/2016-CE (NT) dated 01/03/2016, which specified the period for filing the refund from the date of receipt of payment in convertible foreign exchange.

The respondent contended that even under the unamended provision, the refund under Rule 5 needed to be filed within one year as per Section 11B of the Central Excise Act, 1944. The date of export for services was considered as the receipt of remittance of convertible foreign currency. The respondent filed the refund within one year from the receipt of convertible foreign exchange, thus complying with the time limit.

The Tribunal analyzed the relevant provisions, including Notification No.27/2012-CE (NT) and Section 11B of the Central Excise Act, 1944. It was noted that the export of service is completed only upon the receipt of convertible foreign exchange by the service provider. Regardless of invoicing, the export is considered complete when foreign exchange is received. As the refund claims were filed within one year from the date of receipt of foreign exchange, they were within the specified period under Section 11B. The Tribunal referred to a previous judgment supporting this interpretation.

The claims were filed under Rule 5 of the Cenvat Credit Rules, which allows for the refund of Cenvat credit used in exported products or services. The conditions, safeguards, and limitations for such refunds were specified in Notification 5/2006. The export of services had to comply with the Export of Service Rules, 2005, and the refund claim had to be filed within the period specified in Section 11B of the Central Excise Act, 1944. The Tribunal upheld the decision that the refund claims were not time-barred, as they were filed within one year from the receipt of foreign exchange, as required by the relevant provisions.

Therefore, the Tribunal allowed the appeal, ruling that the refund claims were filed within the prescribed time limit and were not time-barred. The decision was based on the interpretation of the relevant legal provisions and the specific requirements for claiming refunds under Rule 5 of the Cenvat Credit Rules.