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2016 (2) TMI 849 - CESTAT BANGALORE

2016 (2) TMI 849 - CESTAT BANGALORE - TMI - Refund of such accumulated unutilized Cenvat credit - Rule 5 of CCR - Export of services some of which taxable and some non-taxable. - Nexus between input service and output services - period of limitation - relevant date - Held that:- such nexus can be examined only at the level of the original adjudicating authority. - Matter remanded back on this ground.

Regarding period of limitation - Held that:- the relevant date was held to be the dat .....

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.4.2011 and as such, this is not one of the issues to be decided in the present case. Accordingly, the same is kept open.

We find no merits in the appellant's contention on the point of limitation. Accordingly, we uphold a part of the impugned order vide which he has held that a part of the demand is barred by limitation. Inasmuch as the appeal stands remanded to the original adjudicating authority for the purpose of examination of nexus, he would decide the quantum of refund falling .....

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pellant-assessee is engaged in export of services, some of which taxable and some non-taxable. He was also availing the benefit of Cenvat credit of service tax paid on various input services. The said credit so availed by him is being utilized for payment of tax on taxable export services. Inasmuch as he was also exporting exempted services, they were left with unutilized accumulated Cenvat credit so availed by him. 2. In terms of the provisions of Rule 5 of the Cenvat Credit Rules 2004, he is e .....

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against the assessee on the point of time-bar but remanded the matter to the original adjudicating authority for examining nexus between input service and output service, for the purpose of refund claim. 3. Both sides are in appeal before us. Revenue is aggrieved with that part of the order vide which the Commissioner (Appeals) has remanded the matter. It is the Revenues contention that the Commissioner (Appeals) has no power to remand. It is also the appellants grievance that instead of rema .....

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e appellant s contention on the issue of time-bar, we find that the period of dispute is April 2007 to March 2008 whereas the application for refund of the accumulated unutilized credit was filed by the appellant on 30.6.2008. As such, a part of the demand in question is barred by limitation. The learned advocate has drawn our attention to the provisions of Rule 5 of the Cenvat Credit Rules, notification issued under that rule being Notification No. 5/2006-C.E. (N.T.) dated 14.3.2006 as also som .....

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d apply and in the absence of any relevant date defined, it should be left to the assessee to decide as to from which point of time, they were not in a position to utilize the credit and claim refund thereafter. 5. As regards the above arguments of the learned advocate, learned Commissioner (A.R.), by reading of the notification as also the provisions of Rule 5 submits that for claiming such refund, the matter cannot be left to the discretion of the assessee to decide as to which point onwards, .....

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considered the submissions made by both sides. The short question required to be decided in the appellant s appeal is as to whether the limitation prescribed under Section 11B of the Central Excise Act, 1944 is relevant for claim of refund of excess credit in terms of Rule 5 of the Cenvat Credit Rules, 2004 read with the Notification No. 5/2006-C.E. (N.T) dated 14.3.2006. The reading of Rule 5 of the Cenvat Credit Rules makes it clear that an assessee is required to adjust the credit so availed .....

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fect that such applications are required to be filed before expiry of the period specified under Section 11AB of the Central Excise Act, 1944. On going through the Section 11B, we find that the relevant dates stand defined in terms of the Explanation (b) to the said Section. No doubt, under the various clauses of the said Explanation (b), there is no definition of relevant clause relatable to the refund of excess unutilized credit in terms of the Rule 5 of the Cenvat Credit Rules, 2004. 7. Howev .....

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, the learned A.R. has relied upon the Division Bench decision in the case of Hyndai Motor India Engg (P) Ltd. and the Hon ble Madras High Court s decision in the case of GTN Engineering (I) Ltd. referred above. 8. On going through the above, we find that the decisions relied upon by the learned advocate are Single Member decisions which stand rendered, without taking note of the decision of the Hon ble High Court of Madras in the case of GTN Engineering (I) Ltd. The Honble Madras High Court s .....

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ty Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be. For the purpose of finding out as to the relevant date for the purpose of making claim for refund of CENVAT credit, Rule 5 should be made applicable. It is the contention of the learned counsel for the assessee that the provision defining relevant date does not cover the claim for refund of CENVAT credit. We may point out that when a statute empowered for such claim, the said provision must be .....

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prescribed in the notification, the relevant date must be the date on which the final products are cleared for export. If any other conclusion is arrived, it will result in disentitling any person to make a claim of refund of CENVAT credit. Admittedly, the respondent has made a claim only invoking Rule 5 of the CENVAT Credit Rules, 2004. In that view of the matter, there cannot be any difficulty for us to hold that the relevant date should be the date on which the export of the goods was made a .....

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he Export of Services Rules, 2005, the export of service is complete when the consideration for the same is received from the foreign buyers. The said issue has been considered by the Tribunal in the case of Hyndai Motor India Engg. (P) Ltd. (supra) and it was specifically held as under : 4. Learned counsel submitted that since all the refund claims have been filed within one year from the date of receipt of consideration for the services rendered, if it is accepted that the period under Section .....

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ported and not the date when services were provided. No contrary decision has been produced before us by the learned AR. We also find that in the case of goods exported, the relevant date would be the date of export of goods but the same analogy may not be applicable in respect of relevant date for the purpose of refund. The liability to pay tax or duty arises in the case of manufactured goods as soon as they are manufactured whereas in the case of service tax till the law was amended, only when .....

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e that the relevant date for calculating the time limit under Section 11B also should be the date on which consideration is received. Having regard to all these circumstances in our opinion the decision of the Tribunal even though it has not discussed all these aspects, would be applicable to the facts of this case. The learned counsel submitted that all the refund claims are within time if the date of receipt of consideration is taken into account. As seen from the above, the relevant date for .....

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in the case of Hyundai Motor India Engg. (P) Ltd. (supra) on the ground that it was export of goods in those cases whereas the export of service is involved in the present appeal. However, we find no justification to accept the differentiation made by the learned advocate inasmuch as the same Rule 5, the same Notification No. 05/2006-C.E issued under Rule 5 and the same Section 11B of the Central Excise Act which was the subject matter of the Hon ble High Court s decision is involved. The learne .....

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. 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 to provide for safeguards, conditions and limitation, provides such limitation, it cannot be said that Section 11B cannot be applied. It was argue .....

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notification or amending a rule or for any other purpose, the remedy is under Article 226 of the Constitution or Article 32 of the Constitution and therefore, the Tribunal can only see whether notification or rule or act and whether those provisions have been followed or not and cannot go into correctness or virus of a provision of a rule or notification. Therefore, we have to apply the notification and only if there is ambiguity, we may have to resort to interpretation but not when the notifica .....

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liament. We also take note of the fact that Hon'ble Supreme Court has taken a view that notification is part of statute and therefore we cannot say that it is beyond the power to incorporate a provision like this in the notification. Moreover, if the notification was to reproduce the provisions of section 11B of Central Excise Act without referring to the section, this objection could not have been raised at all. Another argument advanced was that Section 11B would not be applicable for Cenv .....

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ubmitted 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 .....

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nce Act, 1994 makes provisions of Section 11B applicable for the purpose of service tax matters also. When Section 11B is applicable to service tax matters, we have to replace words 'excisable goods' used under Section 118 as 'services'. Therefore, for the purpose of refund, in view of the specific provisions of Section 83 and notification under Rule 5, it is necessary to substitute service in place of goods. We are not able to agree with the submission that this cannot be done. .....

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purpose of refund. In view of this reason, this submission cannot be accepted. 6.16. Issue No.16: Method for calculation of relevant date. Next question arises is how to apply Section 11B for calculating limitation. The Hon'ble High Court C.C.E. vs. GTN Engineering (I) Ltd. [2012 (28) S.T.R. 426 (Mad.)] = 2012-TIOL-369-HC-MAD-CX, has taken a view that in such cases, the date of export of goods would be relevant date for arriving at the relevant date. Learned counsel on behalf of the appellan .....

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disallowance of credit which had not become final and therefore, refund claim could not have been filed by the assessee at all. Paragraph 8 of the said decision is relevant and reproduced below. "8 We are of the considered opinion that in fact the issue sought to be raised by the appellant-Revenue is already answered by Hon'ble Supreme Court in the case of Samtel India Ltd. v. CCE reported in 2003 (155 14 (S.C.) = 2003-TIOL-40-SC-CX and, therefore, in this appeal no question of law ari .....

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ority 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 .....

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opinion, merely because the refund application was not filed strictly within 6 months before expiry of period specified in Clause 6 of Appendix read with Section 11B ibid but was filed late by 27 days could not have been made the sole ground for the rejection of application as barred by limitation. In fact, the claim in question did not fall strictly within the four comers of Section 11B but it essentially fell within the four corners of Clause 6 of Appendix to notification issued under Rule 57F .....

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decision cited by learned counsel on behalf of the assesses is the decision rendered by Hon'ble High Court of Gujarat in the case of Commissioner of C. Ex. & C. Surat-I vs. Swagat Synthetics (2008 (232) E. L T. 413 (Guj.)] = 2008-TIOL-666-HC-AHM-CX. This decision was considered by Hon'ble High Court of Madras in the case of Commissioner of C. Ex., Coimbatore vs. GTN Engineering (I) Ltd. (supra). In Swagat Synthetics case (supra), Hon'ble High Court of Gujarat took note of the de .....

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er Rule 57F of the Rules and Notification No.29/96-C.E. (N.T.) dated 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) .....

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ification 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. 2004 or Service Tax Rules, 1994 in original. That application should be filed before the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be. For the .....

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in the manufactures of final produce which is cleared for export under bond or later 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 shall be allowed." 15. A reading of the above rule, though there is no specific relevant date is prescribed in the notification, the relevant date must be the date on which the final products are cl .....

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ied upon the decision rendered by Hon'ble High Court of Andhra Pradesh 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.) and submitted that when there are decisions taking different views by co-ordinate Benches of Hon'ble Supreme Court, the later is better. On this ground also, the decision of Hon'ble High Court of Madras rendered in the case of C.C.E. vs. GTN Engineering (I) Ltd. (supra) can be applied to the facts of the .....

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endered 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.)] = 2006-TIOL-469-HC-KAR-CX. In this case, refund claim was preferred on the ground that the assessee had stopped prod .....

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