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2020 (11) TMI 240 - AT - Service Tax100% EOU - Refund of CENVAT Credit - denial on the ground that both the input service and output service fall under the information technology services and also on the ground that the amounts credited as per Foreign Inward Remittance Certificates (FIRC) are prior to the date of export invoices - proper proof of export was not provided and there was no clarification as to whether the software is an input service for the services exported by them - HELD THAT:- From the documents presented including the agreement which the appellant had with M/s Softential Inc USA, the invoices , the FIRCs, the statement by the banker and the set off letter issued by the RBI we were convinced that what the appellant had imported is a software which they used to produce their export services. In fact, the service tax on the imported input service was paid by the appellant themselves under reverse charge mechanism under section 66A of the Finance Act, 1994. They have reflected this payment of service tax in their ST-3 returns. There is nothing on record or in the submissions made by both parties before us to show that the Department has objected to they paying service tax. After paying the service tax the appellant has taken Cenvat Credit of the service tax paid treating the same as input service and showed it in their ST-3 returns. The Department has not objected to the appellant’s taking Cenvat Credit. It is evident that the Department has accepted that the Cenvat Credit has been taken on the “input service” by the appellant. It is now a well established principle that once Cenvat Credit is allowed on any goods or services as inputs or input service they do not cease to be so while processing a refund claim under Rule 5 of Cenvat Credit Rules, 2004. There is no separate definition of input or input service either in Rule 5 of Cenvat Credit Rules, 2004 or in Notification No. 5/2006-CE. Therefore, the definition under Rule 2 of Cenvat Credit Rules, 2004 applies both to taking CENVAT credit and claiming its refund under Rule 5. Whether the input service so used is an input service used for export service or it is an input service used for some other service, such as domestically sold services? - HELD THAT:- During the relevant period, only refund of Cenvat Credit on input service used in providing output service which was exported was allowed. Therefore, there can be cases where the input service was for output service A which is domestically sold but not an input service for output service B which is exported. However, in this particular case the unit is a 100% export oriented unit and there is no domestic sale. Therefore, there is no scope for such an apprehension. Export proceeds were realised even before the invoices were issued - HELD THAT:- The FIRCs do not show the invoice numbers and therefore there is doubt whether any foreign exchange has been realised at all against the so called exported services. Learned Counsel clarified that they had got a certificate from the Chartered Accountant certifying that the FIRCs pertain to receipts of foreign exchange for the exports concerned - The FIRCs, in the standard format, do not usually indicate the invoice numbers. If the importer or exporter has a running account the exports may take place continuously and the overseas buyer may keep remitting from time to time. It can only be clarified by the Chartered Accountants or the banks or auditors as to which payment the remittances in the FIRCs pertain to. In this case, such a statement was provided by the bank. A set off letter has been received in respect of appellant from the RBI. Therefore, this apprehension of the Department that the export proceeds have not been realised is not well founded. Grant of Interest - HELD THAT:- Hon’ble High Court of Gujarat, has, in the case of Reliance Industries Limited.,[2011 (7) TMI 1141 - SC ORDER] held that refund of Cenvat Credit under Rule 5 of Cenvat Credit Rules, 2004 is also a refund under section 11B of the CEA, 1944 and therefore, the provisions of interest under Section 11BB apply and this decision was upheld by the Hon’ble Supreme Court by dismissing the SLP filed by the Revenue. Therefore, the appellant is also entitled to interest on refund under Rule 5 of Cenvat Credit Rules, 2004. The appellant is entitled to refund under Rule 5 of Cenvat Credit Rules, 2004 along with interest under Section 11BB as applicable - Appeal allowed - decided in favor of appellant.
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