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2015 (12) TMI 414 - CESTAT MUMBAI

2015 (12) TMI 414 - CESTAT MUMBAI - TMI - Denial of refund claim - accumulated Cenvat credit against export of Services in terms of Rule 5 of CCR, 2004 and Notification No.5/2006 CE (N.T.) - Bar of limitation - Held that:- It is clear that payment received in Indian Rupees for which FIRC issued by the bank and payment is routed through foreign bank qualifies the condition of payment 'convertible foreign exchange', therefore on this ground refund cannot be rejected. As regard Cenvat Credit in res .....

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. 10/2009 dated 31/10/2009 and 11/2009 dated 31/11/2009. I therefore hold that respondent is not entitle for the refund in respect of two invoices. - Decided partly in favour of Revenue. - Appeal No. ST/89780/14 & ST/89781/14 - Dated:- 2-7-2015 - Ramesh Nair, Member (J) For the Appellant : Shri R K Das, Dy. Commissioner ( AR ) For the Respondent : Shri S S Gupta, Consultant ORDER Per Ramesh Nair This appeal is directed against Order-in-Appeal NO. 604-605/PD/14 dtd. 17/6/2014 passed by the Commis .....

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tance against export of service was received in Indian Rupees and certain services i.e. rent a cab service, outdoor catering service are not input service therefore refund of service tax of the said services are not admissible. Aggrieved by the said order in original, appellant filed appeal before the Commissioner (Appeals) who allowed the appeal on the ground that refund claim was filed within one year from the realization of the proceeds against export services. As regard the foreign remittanc .....

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service, outdoor catering service. Ld. Commissioner has found that in terms of Circular No. 120/01/2010 ST dated 19/1/2010 it specifically provides that essential services i.e. rent a cab, outdoor caterer's services used by BPO/Call centre for provisions of their output services would qualify as input services and will be eligible for taking credit as well as refunds. In view of the said circular, Ld. Commissioner (Appeals) allowed the Cenvat Credit and the refund their against. Aggrieved b .....

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eign exchange. Therefore in absence of compliance of this condition export is not compete therefore refund is not admissible, in all such cases where the payment was received in Indian Rupees. As regard limitation, he submits that period of refund is October, 2009 to March, 2010 is hit by limitation of time. He submits that in case of export of service, export is complete when foreign exchange received in Indian rupees therefore date of export of services is date of receipt of foreign exchange. .....

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2009 to march 2010. The foreign remittance as per FIRC received on 4/11/2009 and 10/11/2009 respectively. Only against these two invoices refund claim was filed beyond the period of one year from the date of remittance. Except these two invoices, in respect of other invoices, refund was filed within a period of one year from the date of remittance received by the respondent. Therefore at the most, refund related to these invoices only can be denied. As regard the ground of appeal of the Revenue .....

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not in convertible foreign exchange. As regard the Cenvat credit in respect of certain services, i.e. rent a cab service, outdoor catering service, he submits that Ld. Commissioner (Appeals) has given findings that Cenvat Credit in respect of these services are clearly admissible in term of Board Circular dated 19/1/2010. He further submits that in various Tribunal judgments, services of rent a cab and outdoor catering services have been held as admissible input services, except in case part of .....

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pt of foreign remittance towards services provided, therefore I find that only refund claim on these two invoices are not admissible and in rest of cases refund is well within time limit prescribed, therefore remaining refund claim is admissible. As regard payment received in Indian Rupees, I am of the view that merely because the payment is received in Indian Rupees it cannot be said that payment against export has not been received in Convertible Foreign exchange, as provided in the Export of .....

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eld that Indian Rupees received against export of services through foreign bank is convertible foreign exchange and the same is in compliance of the condition provided in the Export of Services Rules, 2005. The relevant paras of the order of Sun-Area Real Estate Pvt Ltd case are reproduced below: "5. I have carefully considered the submissions made by both the sides. It is not in dispute that the remittance towards the payment of service was received in Indian rupees. However, though the pa .....

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n of foreign exchange is upto ₹ 15,000/-certificates in form BCI with serial numbers and reference numbers may be issued on the letter-head of the authorised dealer (with their 'Logo' printed on it). Since inward remittances received for opening of or credit of Non-Resident (External) accounts/FCNR accounts can be repatriated freely, authorised dealers should not issue certificates against such remittances." 6. From the above provision it is clear that Foreign Inward Remittanc .....

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e said Notification is reproduced below: "4. Manner of Repatriation :- (1) On realisation of foreign exchange due, a person shall repatriate the same to India, namely bring into, or receive in, India and- (a) sell it to an authorised person in India in exchange for rupees; or (b) retain or hold it in account with an authorised dealer in India to the extent specified by the Reserve Bank; or (c) use it for discharge of a debt or liability denominated in foreign exchange to the extent and in t .....

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uthorised dealer, the payment in rupees shall be deemed to have repatriated the realized foreign exchange to India. In the present case, the payment in Indian rupees was received from foreign country through Deutsche Bank. Therefore, the said Indian rupee is nothing but foreign exchange repatriated from foreign country to India. Therefore, such payment in rupees is equal to the foreign exchange. The manner of receipt of foreign exchange is provided under Notification No. FEMA 14/2000-RB dated 03 .....

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xchange (1) member countries in the Asian Clearing Union (except Nepal) namely, Bangladesh. Islamic Republic of Iran, Myanmar, Pakistan and Sri Lanka a) payment for all eligible current transactions by debit to the Asian Clearing Union dollar account in India of a bank of the member country in which the other party to the transaction is resident or by credit to the Asian Clearing Union dollar account of the authorised dealer maintained with the correspondent bank in the member country; and b) pa .....

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uyer." 7. From the above regulation and serial No. (2) of the Table, it is very clear that the payment in rupees from the account of a bank situated in any country (other than a member country of Asian Clearing Union or Nepal or Bhutan) is a manner of receipt of foreign exchange. In the present case, as evident that the Indian rupees was received thru the account of Deutsche Bank which is situated in foreign country. Therefore, in terms of Regulation 3 made under Section 47 of the Foreign E .....

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t between the appellant and the foreign reinsurer, and that the remittance that the amount due to the foreign re-insurers as also the brokerage due to the appellant and the balance due to the foreign reinsurer is remitted (and expressed so) in dollars. It is common ground that the entire transaction effected through the media of the Reserve Bank of India is expressed in foreign exchange and in effect the retention of the fee due to the appellant Is dollars for the services rendered. This, accord .....

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led in the Reserve Bank of India regarding the transaction, we are unable to uphold the view of the respondent that the income under the agreement is generated in India or that the amount is one not received in convertible foreign exchange. We are of the view that the income is received in India in convertible foreign exchange, in a lawful and permissible manner through the premier institution concerned with the subject-matter - the Reserve Bank of India. In this view, we hold that the proceedin .....

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yment to be made by the insurance broker in India to the foreign insurer was reduced to the extent of his brokerage and remaining amount was remitted to foreign insurer in the foreign exchange. The issue was whether the brokerage in Indian rupees retained by the Indian Insurance broker shall be treated as foreign exchange or otherwise. The hon'ble Supreme Court has held that the said amount of brokerage retained by the Indian insurance broker from the total amount due to the foreign insurer .....

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received in India, the same is in lieu of foreign exchange which was saved at the time of repatriation of Indian rupees to foreign country. On this logic under the Foreign Exchange Management Act also it provided that if the payment in India rupees is received in India through banking channel it is deemed to be convertible foreign exchange. 10. As regard the judgments relied upon by the learned counsel, I have gone through the same. However, same are need not be discussed, in view of my above d .....

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r-in-Appeal, I find that an amount of ₹ 1,64,081/- was held as admissible. Therefore, the appellant should not be aggrieved with this part of the amount. 11. On the other issues of admissibility of input service credit in respect of security services and air travel services, first of all, this issue of admissibility as input service was not raised in the show cause notice. Therefore, denial of refund of ₹ 7,747/- and ₹ 1,051/-respectively is not correct. Secondly, the appellant .....

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