TMI Blog2015 (3) TMI 346X X X X Extracts X X X X X X X X Extracts X X X X ..... ispute in several cases - Held that:- the place of removal has to be considered as port/airport/land customs station. Therefore once place of removal is taken as port/airport/land customs station all the services utilized up to the stage would become eligible for refund under Rule 5 of the balance of CENVAT credit. Whether CENVAT credit can be refunded under Rule 5 when there was no notification prior to 14.03.2006. - Held that:- refunds cannot be rejected on the ground that earlier Notification No. 11/2002-Cus. (NT) dated 01.03.2002 did not allow refund of credit available in respect of input services but limited only to inputs in view of the fact that during that time the rule itself did not provide for refund of credit in respect of input services. Nexus between the input services and the output services. - Held that:- the matter should be remanded to enable the appellant to establish integral connection between the service and the business of manufacture of final product, it is nobody's case that there is no need to establish the relation between the input services and the business of manufacture. Foreign Inward Remittance Certificate. - Held that:- what is requi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is service provider and consideration paid where the claimant is service receiver. This decision was rendered in the case of Hyundai Motor India Engineering (P) Ltd. vs. C.C.E. Hyderabad [2014 (7) TMI 329 - CESTAT BANGALORE]. Therefore in our opinion, this decision can be followed. - ST/00100/2008 ST/00563/2008 ST/00564/2008 ST/00565/2008 ST/00566/2008 ST/00567/2008 ST/00568/2008 ST/00057/2009 ST/00108/2009 ST/00740/2009 ST/00957/2009 ST/00511/2010 ST/00638/2010 ST/00790/2010 ST/00795/2010 ST/00796/2010 ST/00828/2010 ST/00829/20 - Interim Order No. 79 to 152/2014 - Dated:- 18-9-2014 - B S V Murthy And S K Mohanty,JJ. For the Appellants : Shri K S Ravishankar, Adv. Shri Rajesh Chander Kumar, Adv. Shri G Shivadass, Adv. Shri Rajesh Kumar, CA Shri Harish Bindu Madhavan, Adv. Shri Deepak Jain, CA Shri B G Chidananda Urs, Adv Shri Sankar Bala, CA For the Respondents : Shri S K Singh, Commissioner (AR) Dr A K Nigam, Addl Commissioner (AR) Shri R Gurunathan, Addl Commissioner (AR) Shri S Teli, Deputy Commissioner (AR) Shri N Jagdish, Superintendent(AR) ORDER Per: B S V Murthy: In order to reduce pendency of appeals, it has been decided that appeals involvin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion for eligibility or otherwise 3. Bar Association is requested kindly to circulate this note among all their members so that the time taken for dispute resolution is reduced. This may be done today itself. (B S V Murthy) Technical Member To 1) The Bar Association 2) A.Rs. with a request to prepare for the hearing and if possible make written submission available. If special counsel has been appointed for any the cases, they may be informed to be available and also a copy of this note may be given to them. 3) Notice Board 4) D.R. 3. However subsequently when verification was taken up it was found that some of the cases were not on this issue and they were separated. 4. When the cases were taken up, the learned advocate on behalf of the appellant M/s. Apotex Research Pvt. Ltd. in appeal No. ST/100/2008 submitted that it may not be proper to pass an order on the common issues and thereafter remand the matter to the adjudicating authority which was the presumption made by the Bench before the hearing started. He submitted that it would be appropriate to decide each case individually. The authorized representatives on behalf of the Reven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the output service exported in accordance with the Export of Services Rules. 2005. 14th March 2006. Notification No.05/2006-Central Excise (N.T.) G.S.R. (E) In exercise of the powers conferred by rule 5 of the CENVAT Credit Rules, 2004 (hereinafter referred to as the 'said rules'), and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue), No.II/2002 - Central Excise (NT), dated 1st March, 2002, published in the Gazette of India Extraordinary, vide number G.S.R. 150(E), dated 1st March, 2002, the Central Government hereby directs that refund of CENVAT credit shall be allowed in respect of: (a) input or input service used in the manufacture of final product which is cleared for export under bond or letter of undertaking. (b) input or input service used in providing output service which has been exported without payment of service tax, subject to safeguards, conditions and limitations, set out in the Appendix to this notification. Appendix 1. The final product or the output service is exported in recordance with the procedure laid down in the Central Excise Rules, 2002, or the Export of Service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espect of which the exporter claims the facility of refund under this rule. 2. Total turnover means the sum total of the value of,- (a) All output services and exempted services provided, including value of services exported; (b) All excisable and non excisable goods cleared, including the value of goods exported; (c) The value of bought out goods sold, during the given period. 6. The application in From A, along with the prescribed enclosures and the relevant extracts of the records maintained under the Central Excise Rules, 2002, CENVAT Credit Rules, 2004, or the Service Tax Rules, 1994, in original, are filed with the Deputy Commissioner of Central 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). 7. The refund of excise duty or service tax is allowed by the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be. NOTIFICATION NO.07/2010-CX (NT), Dated: February 27, 2010 Sub: Section 3, Rule 5 - Amends notification No.CE (NT) dt.14.03.2006. Form for claiming refund has been amend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Details of service/goods provided with classification under Finance Act 1994/Central Excise Tariff Service tax/Central Excise duty payable Date and details of payment made to service provider Documents attached to evidence of the amount of service tax paid Total export during the period for which refund is claimed Total domestic clearances during the period for which refund is claimed Total amount of CENVAT claimed as refund (4) (5) (6) (7) The table shall be certified by a person authorised by the Board of Directors (in the case of a limited company) or the proprietor or any partner (in case of partnership firm) if the amount of refund claimed is less than ₹ 5 lakh in a quarter. In case the refund claim is in excess of ₹ 5 lakh, the Table shall also be certified by the Chartered Accountant who audits the annual accounts of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in providing the output services will have to be set aside and will have to be reexamined in the light of amendment carried out with retrospective effect by the Government in Finance Act 2010. Therefore wherever the refund has been rejected on the ground of words used in the notification, will have to be remanded to the original adjudicating authority for reconsideration of the eligibility of credit in the light of amendment issued in 2010 with retrospective effect. At this juncture it would be appropriate for us to mention that this Tribunal has also passed a detailed order in the case of CE Gloves Final Order No. 26617-29/2013 dated 09.10.2013 . In this order several input services were considered and their admissibility of CENVAT credit vis-a-vis output services rendered by them and in our opinion this is one of the decisions which should be kept in mind by the original adjudicating authorities when they will be considering the refund claims afresh. In addition to the above decisions in the case of M/s. mPortal India Wireless Solutions (P) Ltd. V. CST, Bangalore [2012 (27) S.T.R. 134 (Kar.)] CCE, Bangalore V. Stanzen Toyotetsu India (P) Ltd. [2011-TIOL-866-HC-KAR-ST] are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T.R. 609 (Bom.), Paragraph 9 of this decision is relevant and is reproduced below: The above finding of the CESTAT cannot be faulted because substituted Rule 5 of the Cenvat Credit Rules, 2004 does not make any distinction between exports made prior to 14.03.2006 or after 14.03.2006. In other words, as per the substituted Rule 5 refund of unutilized Cenvat credit in respect of exports effected in the past is available to the manufacturer as well as provider of output service. Proviso to Rule 5 as it stood prior to the amendment on 14.03,2006 clearly provides that refund of unutilized credit is available to the manufacturer as also by the provider of output service subject to the conditions set out therein. As noted earlier the appellant fulfills all other conditions. Thus, reading the Rule 5 as it stood prior to its amendment, as a whole, it is evident that refund of unutilized credit is allowable not only to manufacturers but also available to providers of output service. This decision was followed in the case of Caliber Point Business Solutions Ltd. Vs. CCE, Belapur [2008-TIOL-693-CESTAT-MUM.] and CCE. Hyderabad-IV Vs. Deloitte Tax Services India Pvt. Ltd. [2008-TIOL-629 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (As per Export of Services Rules), it is possible that export of service may take place even when all the relevant activities take place in India so long as benefits of these services accrue outside India. This is because service tax is a destination based tax. It is felt that many claims have been disallowed because benefit of this Circular was not available and we are quite sure that when the issue is reconsidered, wherever this circular is applicable, the same would be applied and therefore wherever refund claims involve this service and claim has been disallowed on this ground, they have to be remanded with a direction to follow the remand instructions and apply the instructions to the facts of the case. 6.6. Issue No. 6: Nexus between the input services and the output services. We have already taken a view earlier in the order that several services have been considered and decisions rendered and those decisions also have been cited for the purpose of consideration of the services as input services vis-a-vis output service. There are several decisions in the refund claims which are subject matter of dispute before us herein. The lower authorities have taken a view that i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Bombay had considered this issue in great detail. Hon'ble High Court had also considered the decision in the case of Maruti Suzuki Ltd. Finally, the Hon'ble High Court came to the conclusion that the input services should have been used in or in relation to the business of manufacture and the sum and substance of the conclusion is that there is no need for a direct relation between input service with the manufacture. Taking note of the fact that the definition of input service is an inclusive definition and therefore the services which are related to business of manufacture also have to be treated as input service, the Hon'ble High Court made several observations and the most relevant observation is in paragraph 31 and is reproduced for better appreciation. 31. In our opinion, the ratio laid down by the Apex Court in the case of Maruti Suzuki Ltd. ''supra) in the context of the definition of input' in Rule 2(k) of 2004 Rules would equally apply while interpreting the expression activities relating to business in Rule 2(1) of 2004 Rules, No doubt chat the inclusive part of the definition of input' is restricted to the inputs used in or in relati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , both service provider and the service receiver maintain running ledger accounts and receiver of service keep making lump sum payments, in such cases payments made go on getting adjusted towards services rendered. That being the position, the bank will not be in a position to certify that the amount has been received in respect of a specific invoice. Therefore, in such cases it would be unrealistic to require claimants of refund to produce invoice-wise certificate from the bank. Even though several objections have been raised, the Board took note of this problem and in the Circular dated 12.03.2009, taking note of the problems that are arising in considering refund claims filed by various assessees, the Board had come out with clarifications in Circular No. 112/6/2009. In this circular as regards FIRC. Board had clarified that where FIRCs are issued on consolidated basis, exporter should submit self-certified statement along with FIRC showing details of exports to which FIRC pertains. Refund should be allowed on such certified statement. Further the exporter should maintain a register, which should be reconciled with remittances periodically. We are not able to agree with the subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he manufacturer had not been registered during the period when credit was taken. This issue is no longer res integra since in the case of mPortal India Wirless Solutions P. Ltd. vs. C.S.T., Bangalore [2012 (27) S.T.R. 34 (Kar.)], Hon'ble High Court of Karnataka has taken a view that registration with department is not a pre-requisite for claiming the Cenvat credit. At this juncture, it would be appropriate to refer to Rule 3 of Cenvat Credit Rules, 2004 which also provides that a manufacturer or producer of final products or a provider of service shall be allowed to take credit and nowhere the word 'registered' is found. If the intention was not to allow the Cenvat credit when the unit or the service provider was not registered, Rule 3(1) of the Cenvat Credit Rules would have read as a 'registered manufacturer' or registered service provider. Therefore, the rejection of the claim for refund of Cenvat credit is not admissible when the unit was not registered cannot be upheld. 6.11. Issue No. 11: Condonation of omissions in documents as per the provisions of Rule 9 of Cenvat Credit Rules, 2004. Rule 9(2) of Cenvat Credit Rules provides that if the document d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ragraph is reproduced below for better appreciation. 6. The assessee is a 100% export oriented unit. The export of software at the relevant point of time was not a taxable service. However, the assessee had paid input tax on various services. According to the assessee a sum of ₹ 4,36,985/- is accumulated Cenvat credit. The Tribunal has categorically held that even though the export of software is not a taxable service but still the assessee cannot be denied the Cenvat credit. The assessee is entitled to the refund of Cenvat credit. Similarly insofar as refund of Cenvat credit is concerned, the limitation under Section 11B does not apply for refund an accumulated Cenvat credit. Therefore, bar of limitation cannot be a ground to refuse Cenvat credit to the assessee. Learned A.R. on behalf of the Revenue submitted that this decision was given in the case of 100% E.O.U. and therefore applying the same to other units which are not 100% E.O.U. was not correct. Hon'ble High Court of Bombay in the case of Repro India Ltd. vs. Union of India [2009 (235) E.L.T. 614 (Bom.)] has taken a view that even if finished goods are exempted, the refund of Cenvat credit would be admiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refund claimed on the ground that output service is not taxable or exempted cannot be sustained. The Tribunal in the case of KPIT Cummins Infosystems Ltd. vs. C.C.E. [2013 (32) S.T.R. 356 (Tri.) held that Cenvat credit for export of exempted service would be available as refund. The Tribunal relied upon Repro India Lt. vs. Union of India [2009 (235) E.L.T. 614 (Bom.)] (supra) referred to by us above while coming to this conclusion. In the case of mPortal India Wireless Solutions (supra) also the same view was taken by Hon'ble High Court of Karnataka. In view of these decisions, the admissibility of Cenvat credit is not relevant for the purpose of determination whether refund is admissible under Rule 5 of CCR or not. 6.15. Issue No. 15: Relevant date for filing refund claim. As regards limitation, according to Notification No. 5/2006-C.E. (NT) dated 14.3.2006, the provisions of Section 11B of Central Excise Act would be applicable for the purpose of considering whether claim is within the period prescribed for claiming refund. Several questions arise. The first question is whether Section 11B would be applicable at all. In view of the fact that Notification which is meant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where a refund of excise duty paid is available in respect of the goods themselves or, as the case may be, the excisable materials used in the manufacture of such goods - , the relevant date would be the date of export. It was submitted that no doubt provisions of Section 11B have been made applicable to service tax matters too. It was submitted that provisions relating to relevant date under Section 11B cited in the notification deals with input service for manufacture of excisable goods and therefore, it may not be correct to substitute this with service for the purpose of refund under Rule 5. Therefore, it was submitted that limitation under Section 11B was not applicable at all and therefore, there is no limitation for making claim for refund. It was submitted that in this case, refund being claimed is Cenvat credit and not the duty or tax paid. In fact if we go through the provisions of Rule 5, it provides that Cenvat credit in respect of inputs or inputs service can be utilized for payment of duty or service tax on final product or output service and where such adjustment is not possible, the manufacturer or the output service provider will be allowed refund. Further, we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . v. CCE reported in 2003 (155 14 (S.C.) and, therefore, in this appeal no question of law arises including with respect to the other two issues, The objection of the Revenue that in this very proceeding refund could not have been ordered or the claim of the assessee became barred by time, we are of the considered opinion that when the order with respect to disallowance itself had not become the final, before that the claim of refund could not have been raised by the assessee. Therefore, during the pendency of his claim for Modvat allowance itself was under consideration wherein the authority had jurisdiction to pass appropriate order with respect to the entitlement of Modvat benefit to the assessee. then in that situation, the assessee could not have moved any application for refund of the said amount which would have been in air. In this situation also, the question of bar of limitation in fact cannot apply and. therefore, there arises no question of law in this appeal. The second decision cited by learned counsel was rendered by Hon'ble High Court of Madhya Pradesh in the case of STI India Ltd Vs. Commissioner of Customs C Excise, Indore (2009 (236) E.LT. 248 (MP)]. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.9.1996 and in both the rules and the notification, there is no time limit and on this ground, Hon'ble High Court of Gujarat held that there would be no limitation and therefore, refund is admissible. Therefore, the decision of Hon'ble High Court of Gujarat cannot be applied to the facts of the cases before us. We find that Hon'ble High Court of Madras had considered the same issue in C.C.E vs. GTN Engineering (I) Ltd case (supra). In that case. Hon'ble High Court considered the provisions of Section 11B of Central Excise Act, 1944, Rule 5 of Cenvat Credit Rules, 2004 and Notification (No. 5/2006-C.E. (N.T.) issued and thereafter, in paragraph 14 came to the conclusion that limitation would be applicable. In the subsequent paragraph, Hon'ble High Court also decided on what basis the limitation could be calculated. Paragraphs 14 15 are relevant and are reproduced below: 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, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court and in this case, the decisions have been rendered by different High Courts, There are four High Courts decisions and if all of them are applicable, in our opinion, the principles of ratio laid down in the case of S.K. Mahaboob Ali vs. Director General Police, C.R.P.F., New Delhi [2005 (192) E.L.T. 143 (A P.) rendered by Hon'ble High Court of Andhra Pradesh are applicable and relevant. 7. At this stage, it is inappropriate to leave out a decision which was mentioned by one of the counsels appearing for the appellants and this decision is rendered by Hon'ble High Court of Karnataka in the case of Union of India vs. Slovak India Trading Co. Pvt. Ltd. [2006 (201) E.L.T. 559 (Kar.)]. In this case, refund claim was preferred on the ground that the assessee had stopped production due to closure of their factory and had come out of Modvat Scheme. We consider that the decision rendered in that case involved totally different set of facts and therefore it cannot be applied to the facts of the present cases 8. After considering the decision of Hon'ble High Court of Madras in the case of C.C.E. vs. GTN Engineering (I) Ltd [2012 (28) S.T.R. 426 (Mad.)] this Tribunal ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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