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M/s AFFINITY EXPRESS INDIA PVT LTD Versus COMMISSIONER OF CENTRAL EXCISE, PUNE I

2014 (6) TMI 593 - CESTAT MUMBAI

Refund claim - Export of services - period of limitation - Rule 5 of the Cenvat Credit Rules, 2004 - Notification No.5/2006 CE(NT) - period fo limitation to be computed from the date of invoice / export or from the date of receipt in convertible foreign exchange - Held that:- Of course, if payment for export of service is to be obtained in rupees or non-convertible foreign exchange, then it will not be treated as export of service. Further, reading of Rule 4 of the Export of Service Rules indica .....

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le foreign exchange. In the present case, the appellants are providing business auxiliary service and management consultancy services. Thus the export of service takes place at the time or issuing invoice. The payment condition is only to ensure that the service provider receives the payment in convertible foreign exchange so as to get the benefit of service tax. The date of receipt of such payment is not relevant for determining the time of export. In view of the above analysis, I hold that the .....

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B/C-IV(SMB) - Dated:- 6-5-2014 - P K Jain, (T) For the Appellant : Shri Prasad Paranjape, Adv. For the Respondent : Shri Rakesh Goyal, Addl. Commissioner (AR) JUDGEMENT Per: P K Jain: The brief facts of the case are that the appellants filed a refund claim under Rule 5 of the Cenvat Credit Rules, 2004 read with Notification No.5/2006 CE(NT) dated 14.3.2006 for an amount of ₹ 14,53,763/- for the period October, 2008 to December, 2008. The said refund claim was filed on 23.12.2009. The refun .....

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t specify the relevant date for computing the time limit prescribed under Sec. 11B of the Central Excise Act. Similarly. Sec. 11B of the Act though defines the relevant date in different situation, the said section does not specify the relevant date in respect of refund of Cenvat Credit under Rule 5 of the Central Credit Rules. The ld. advocate quoted case laws in support of his contention that there is no time limit for filing the refund claim under Rule 5 of the Cenvat Credit Rules. Even if th .....

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d vs. Rangdhara Polymers - 2011 (264) ELT 275 (Tri.-Ahmd.) (3) Global Energy Food Industries vs. CCE, Ahmedabad - 2010 (262) ELT 627 (Tri.-Ahd.) (4) Alcomponics Sales Pvt.Ltd. vs. CCE, Noida - 2012 (279) ELT 280 (Tri.-Del.), (5) Uttam Steel Ltd. vs. Union of India - 2003 (158) ELT 274 (Bom.); (6) STI India Ltd. vs. Commr. of Cus & C.Ex. Indore 2009 (236) ELT 248 (M.P.); (7) Comm. Of C.Ex & Cus, Surat-I vs. Swagat Synthetics 2008 (232) ELT 413 (Guj.) (8) CCE.Ex. Pune-1 vs. Eaton Industrie .....

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es into account the judgement of Madhya Pradesh High Court in the case of STI India Ltd. vs. Commissioner - 2009 (236) ELT 248 (M.P.) as also the Hon'ble Gujarat High Court judgment in the case of CCE vs Swagat Synthetics (supra). Ld. A.R. further stated that Notfn. No.5/2006-CE(NT) clearly prescribed in clause (6) that the refund claim is to be filed before the expiry of the period specified in section 11 B of the Central Excise Act, 1944. Once the Notification prescribes a condition for gr .....

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uts or input services used in the export of services and the said relevant date will precisely fit into the scheme relating to export of services and therefore the relevant date has to be counted from the date of export. Ld. A.R. also stated that Export of Service Rules do not specify the day for the act of export but only details the condition to be satisfied so as to consider export of service. Ld. A.R. stated tht if we see the definition given in Explanation to Sec.11B, even when goods do not .....

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detail the relevant date but the day invoice is raised or the services are exported through e-mail or any other means will be the relevant date for export. 4. I have gone though the rival submission. The appellants are claiming refund of accumulated Cenvat Credit under Rule 5 of the Cenvat Credit Rules read with Notification No.5/2006-CE(NT) dated 14.3.2006. Clause (6) of the Appendix of the said Notification reads as under:- The application in Form A. alongwith the prescribed enclosures and the .....

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the period specified under Sec. 11B of the Central Excise Act. Section 11B of the Central Excise Act deals with claim of refund/rebate of duty. Sec.11B (i) provides the limitation period of one year. Further, Clause (B) to Explanation in Sec. 11B (B) defined the relevant date' from which the period of one year is to be computed. The said explanation explains relevant date for different situation. However, situations covered are for export of goods. The situation relating to export of servic .....

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rted by sea or air, the date on which the ship or the aircraft in which such goods are loaded, leaves India, or (ii) if the goods are exported by land, the date of dispatch of goods pass the frontier, or (iii) if the goods are exported by post, the date of dispatch of goods by the Post Office concerned to a place outside India (Emphasis supplied) 6. It would be seen from the above explanation that in case of export of goods if the claim is for refund of duty on excisable materials used in the ma .....

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f the service. I find that this issue has come up before the Hon'ble Madras High Court the case of GTN Engineering (I) Ltd reported in 2012 (281) ELT 185 (Mad.). The relevant portion of the said judgement is as under:- 8. It is the contention of the learned counsel for the Appellant/Revenue that though the provisions of Section 11B of the Central Excise Act, 1944, entitles any person to claim refund of any duty of excise and interest, if any paid on such duty, by itself is not applicable to .....

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n the ground that in all these cases, claims have been made beyond the period of limitation, the Commissioner (Appeals) has rightly rejected all the six claims of the respondent. The said order has been interfered by the CESTAT by holding that as per Rule 5, no period of limitation could be prescribed in the absence of the notification by the Central Government as to the relevant date. This finding of the Tribunal is contrary to the provisions of the Act and Rules and the notification made there .....

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ts if any, paid on such duty, in the wake of the provisions of sub-rule (5) and the notification as such, claims could be made. Nevertheless, in the absence of any notification in regard to the relevant date as defined in Section 11B(5)(B) of the Act, the rejection of the claim for refund on the ground of period of limitation is bad. 10. The learned counsel would draw our attention to the above provision defining the relevant date and contended that none of the clauses contained therein would ap .....

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ns. The relevant portion in Section 11B of the Central Excise Act 1944, reads as under: 11B. Claim for refund of [duty and interest, if any, paid on such duty. - (1) Any person claiming refund of any [duty of excise and interest, if any, paid on such duty] may make an application for refund of such [duty and interest, if any, paid on such duty] to the [Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise] before the expiry of [one year] [from the relevant date] [in s .....

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that provision, a claim for refund is made available in case of refund of duty and interest, if any paid on such duty and as far as that provision is concerned, there is no dispute that it is applicable only in case of duty paid and not on the CENVAT credit facilities. As already pointed out, to tide over the situation and also to make eligible for the manufacturer of the final products which is 100% export oriented, Rule 5 of the CENVAT Credit Rules, 2004. entitles for making claim for refund .....

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acturer or provider of output service towards payment of, (i) duty of excise on any final product cleared for home consumption or for export on payment of duty; or (ii) service tax on output service and where for any reason such adjustment is not possible, the manufacturer or provider of output service shall be allowed refund of such amount subject to such safeguards, conditions and limitations, as may be specified, by the Central Government, by notification." 13. In terms of the said rule, .....

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Excise or the Assistant Commissioner of Central Excise, as the case may be, before the expiry of the period specified in Section 11B of the Central Excise Act. 1944 (1 of 1944)". 14. The said notification prescribes a period of one year, as provided under section 11B of the Central Excise Act, for the purpose of making application in Form-A along with prescribed enclosures and also the relevant extracts of the records maintained under the Central Excise Rules. 2002, Cenvat Credit Rules, 200 .....

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e may point out that when a statute empowered for such claim, the said provision must be read to find out as to the relevant date. Rule 5 specifies that "where any input or input service is used in the manufactures of final product which is cleared for export under bond or letter of undertaking as the case may be, or used in the intermediate product cleared for export, or used in providing output service which is exported, the CENVAT credit in respect of the input or input service so used s .....

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for us to hold that the relevant date should be the date on which the export of the goods was made and for such goods, refund of CENVAT credit is claimed. 16. The learned counsel for the respondent would rely upon a judgment of the Gujarat High Court reported in 2008 (232) E.L.T. 413 (Guj.) [Commissioner of Central Excise and Customs, Surat-I Vs Swagat Synthetics]. That was a case relating to sub-rule (13) of Rule 57F of Central Excise Rules, 1944, which reads as under: "(13) Where any inpu .....

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amount subject to such safeguards, conditions and limitations as may be specified by the Central Government by notification in the Official Gazette." The said rule does not prescribe any time-limit. In the absence of such prescription as to the limitation the Gujarat High Court has held that the claim of refund could not be rejected on the ground of limitation. 17. The learned counsel would also rely upon a Judgment of Madhya Pradesh High Court at indore reported in 2009 (236) E.L.T 248 (M .....

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and the notification which are procedural in nature. As we have found that but for the provision of Rule 5 r/w notification, the respondent could not have filed the application for refund, he has to satisfy the limitation clause as provided under Section 11B of the Act. 18. In view of the above, the order of CESTAT holding that the limitation is not applicable to the facts in question to the case has to be set aside. Accordingly the same is set aside." 7. Ld. counsel for the appellants has .....

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f the Hon'ble Gujarat High Court or Hon'be Madya Pradesh High Court and none of the Judgments take cognizance of the aforesaid judgement of the Hon'ble Madras High Court which is the latest judgement of the Hon'ble Madras High Court which is the latest judgment on the subject. In view of the said position, I am of the view that the period of limitation of one year is required to be enforced and the relevant date for counting the said period of one year will be from date of export .....

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ice when the payment of such service is reveived by the service provider in convertible foreign exchange. I have gone through the Export of Service Rules, 2005. Rule 3(2) and (4) of Export of Services Rules, 2006 reads as under: "2) The provision of any taxable service specified in sub-rule (1) shall be treated as export of service when the following conditions are satisfied, namely - (a) such service is provided from India and used outside India; and (b) Payment for such service is receive .....

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ction 65 of the Act, may be exported without payment of service tax." 9. In Rule 3(2), clause (b) is not to be read in isolation but has to be read with the opening part of Rule 3(2). The opening part of Rule 3(2) states that the conditions are to be satisfied to treat provision of any taxable service as export of service. One of the conditions is that the payment for such service is received in convertible foreign exchange. Such conditions are not unknown in excise and customs administrati .....

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imilarly, here payment is expected to be in convertible foreign exchange. But this does not imply that unless payment is received, act of export of service has not taken place. Of course, if payment for export of service is to be obtained in rupees or non-convertible foreign exchange, then it will not be treated as export of service. Further, reading of Rule 4 of the Export of Service Rules indicates that any taxable service may be exported without payment of service tax. If rule 3(2) is to be r .....

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d management consultancy services. Thus the export of service takes place at the time or issuing invoice. The payment condition is only to ensure that the service provider receives the payment in convertible foreign exchange so as to get the benefit of service tax. The date of receipt of such payment is not relevant for determining the time of export. In view of the above analysis, I hold that the relevant date for determining the period of limitation will be the date of export of services or th .....

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use Agent services is denied on the ground that the appellants have failed to establish that these services are used in providing the output services exported and there is no supporting C.A. Certificate The appellants have explained that the said service is utilized for clearance of import consignment and the said goods were used for purpose of rendering of services. In view of this position, the appellants are entitled to the said refund. Another refund of ₹ 672/- on meal coupons is disal .....

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