2019 (1) TMI 64 - AT - Service Tax

Refund of unutilized CENVAT credit - export of services - the refund has been rejected by the impugned order on the ground that the appellants have not submitted Foreign Inward Remittance Certificate for the said transaction and also on the ground of time limitation - Held that - The Commissioner (Appeals) has observed that the appellant had not produced bank realization certificate as required. Further the Commissioner (Appeals) has relied upon the Suprasesh General Insurance Services & Brokers P. Ltd. 2015 (9) TMI 1219 - MADRAS HIGH COURT , where it was held that the receipt was in Indian currency and it was held to be receipt in convertible foreign exchange and the benefit of export of service was granted. Time limitation - Held that - The Larger Bench of this Tribunal in the case of Span Infotech (India) Pvt. Ltd. 2018 (2) TMI 946 - CESTAT BANGALORE has held that In respect of export of services, the relevant date for purposes of deciding the time limit for consideration of refund claims under Rule 5 of the CCR may be taken as the end of the quarter in which the FIRC is received, in cases where the refund claims are filed on a quarterly basis. The appellant has produced before me non-objection certificate for issuance of FIRC issued by Indus Inc Bank wherein remittance had been confirmed and all details regarding the remitter name, beneficiary name and purpose of remittance have been given. But these documents were not made available before both the authorities below. Therefore, both the authorities have held that appellants have not produced any credible evidence to establish that they have received the payment in convertible foreign exchange - these cases need to be remanded back to the original authority to examine the period of limitation in the light of the Larger Bench decision in the case of Span Infotech (India) Pvt. Ltd. as well as the receipt of foreign exchange in view of the certificates issued by Indus Inc Bank and ICICI Bank and also the fact that in subsequent decision, the Revenue has allowed refund considering the transaction as export. Appeal allowed by way of remand.

Summary

Issues:
Appeals against rejection of refund claims - Timeliness of refund application - Receipt in convertible foreign exchange.

Analysis:
The appellant, a service provider, filed refund claims for unutilized cenvat credit on input/input services used in providing output services without payment of service tax due to inability to utilize said credit. The claims were rejected for failure to provide credible evidence of timely filing, proof of receipt of payments in convertible foreign exchange, and satisfaction of conditions for export of services. Appeals were filed, arguing that the limitation period does not apply to cenvat credit refunds and citing precedents supporting receipt in Indian currency as convertible foreign exchange. The Revenue contended that the time limit should be reckoned from the quarter in which foreign exchange was realized, emphasizing the lack of Foreign Inward Remittance Certificates (FIRC) and export-related documentation. The Tribunal noted that subsequent refund claims were granted as exports, highlighting discrepancies in the original rejection. Relying on a Larger Bench decision, the Tribunal concluded that the cases should be remanded for reevaluation based on the principles outlined, including the receipt of foreign exchange as evidenced by bank certificates and past Revenue decisions. The appeals were allowed for remand to ensure a fair assessment in light of the legal precedents and factual inconsistencies.

The judgment provides a detailed analysis of the issues raised in the appeals, emphasizing the importance of credible evidence in establishing timely refund applications and receipt in convertible foreign exchange for service tax refunds. It underscores the significance of legal precedents and statutory provisions in determining the validity of refund claims, particularly in cases involving export of services and utilization of cenvat credit. The Tribunal's decision to remand the cases for further examination reflects a commitment to upholding procedural fairness and ensuring compliance with legal requirements, as demonstrated by the consideration of relevant case law and factual documentation in reaching a just outcome.