2018 (6) TMI 526 - AT - Service Tax

Refund of service tax paid - Export of services - Time Limitation - Rule 5 of CCR 2004 r/w N/N. 27/2012-CE(NT) - Whether the relevant date for computing the period of limitation of one year for filing the refund claim is to be taken as the date in the invoice or the date of the receipt of foreign exchange? - Held that - In case of export of services, the relevant date is the date of receipt of foreign remittance - the rejection of refund claim on the ground of limitation is unjustified. Refund claim - rejection for the reason that the appellant has not been able to produce the FIRCs - Held that - Production of FIRCs being a procedural requirement and if the appellant is able to establish the receipt of foreign exchange with the invoices, the appellant cannot be denied substantive benefit of refund - For the limited purpose of verification of these remittances with the invoices, the matter is remitted to adjudicating authority. Appeal allowed in part and part matter on remand.

Summary

Issues:
1. Computation of period of limitation for filing refund claim.
2. Rejection of refund claim based on non-production of FIRCs for certain remittances.
3. Rejection of refund claim for non-production of FIRCs in general.

Analysis:

Issue 1: Computation of period of limitation for filing refund claim
The Tribunal deliberated on whether the relevant date for computing the period of limitation of one year for filing the refund claim should be the date on the invoice or the date of receipt of foreign exchange. The appellant argued that the relevant date should be the date of receipt of foreign exchange, citing relevant case law and circulars. The Tribunal agreed with the appellant, emphasizing that in cases of export of services, the relevant date is indeed the date of receipt of foreign remittance. Consequently, the rejection of the refund claim on the grounds of limitation was deemed unjustified and set aside.

Issue 2: Rejection of refund claim based on non-production of FIRCs for certain remittances
The Tribunal addressed the rejection of refund claims related to specific remittances where the appellant failed to produce Foreign Inward Remittance Certificates (FIRCs). The appellant contended that they could establish the receipt of foreign exchange through other means and requested condonation of the procedural lapse. The Tribunal acknowledged the importance of FIRCs but also recognized that the appellant could correlate the remittances with invoices. Consequently, the matter was remanded to the adjudicating authority for verification purposes.

Issue 3: Rejection of refund claim for non-production of FIRCs in general
The Tribunal further considered the general rejection of refund claims due to non-production of FIRCs. The appellant assured that they could furnish the FIRCs if given another opportunity. Acknowledging this, the Tribunal remanded this issue as well to the adjudicating authority for processing the refund claim after allowing the appellant to submit the required FIRCs.

In conclusion, the Tribunal disposed of the appeals in favor of the appellant, setting aside the rejection of the refund claim based on limitation and non-production of FIRCs for specific remittances. The matter was remanded for further verification and processing, ensuring the appellant's substantive benefit of refund is not denied.