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TMI Blog2017 (10) TMI 399X X X X Extracts X X X X X X X X Extracts X X X X ..... ST/20460/2017-SM Rs.28,68,910/- 2 ST/20461/2017-SM Rs.40,50,753/- 3 ST/20462/2017-SM Rs.18,97,259/- 3.1 The appellant filed the refund claims seeking refund of unutilized CENVAT credit paid on input services used for providing the output services exported during the impugned period under Rule 5 of CENVAT Credit 2004 read with Notification No.27/2012-CE dated 18.6.2012. In all these cases, the refund claims were rejected in toto as stated in the table above, for the reasons that the export proceeds were realized in the Indian rupees and not in convertible foreign exchange. Aggrieved by the said order, the appellant filed three appeals before the Commissioner (A) who rejected the appeals by the common impugned order. Hence, the present appeals. 4. Heard both the parties and perused the records. 5. Learned counsel for the appellant submitted that the impugned order rejecting the refund only on the ground that payments have been received in Indian rupee which does not satisfy the requirement of Rule 3(2)(b) of Export of Service Rules, 2005 and therefore, the appellants are not entitled to refund. He further submitted that impugned order is contrary to the binding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pee, it cannot be said that payment against export has not been received in convertible foreign exchange as provided in Export of Service Rules, 2005. Since the Indian rupee is received from the recipient of services through their foreign bank, Bank of America, USA, the receipt of Indian rupee shall be treated as convertible foreign exchange . Further, it is also clearly certified in the FIRC issued by the Bank of America, USA that remittances are in convertible foreign exchange . In the case of CST vs. PMI Organization Centre Pvt. Ltd. cited supra, the Tribunal in Para 6 has observed as under: 6. From the records, I find that it is apparent that except two invoices No. 10/2009 dated 31/10/2009 and 11/2009 dated 31/11/2009 in all other cases refund were filed within one year from the date of receipt 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 tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exchange, in other words, the payment is in convertible foreign exchange. I have gone through the Notification No. FEMA 9/2000-RB dated 3rd May, 2000, the relevant para No.4 of the 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 the manner specified by the Reserve Bank. (2) A person shall be deemed to have repatriated the realised foreign exchange to India when he receives in India payment in rupees from the account of a bank or an exchange house situated in any country outside India, maintained with an authorised dealer." From the sub-para (2) of para 4 above it is very clear that, when a person receives in India payment in rupees from the account of a bank situated in any country outside India maintained with an authorised dealer, the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ountry. Therefore, in terms of Regulation 3 made under Section 47 of the Foreign Exchange Management Act, 1999, in the present case the foreign remittance in Indian rupees through Deutsche Bank is the receipt of payment in convertible foreign exchange. 8. I have gone through the hon'ble Supreme Court's judgment in the case of J.B. Boda a nd Company (supra) wherein it was held that: "12. The facts brought out in this case, are clear as to how the remittance to the foreign reinsurance company is made through the Reserve Bank of India in conformity with the agreement 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, according to us, is receipt of income in convertible foreign exchange. It seems to us that a "two way traffic", is unnecessary. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 discussion and the statutory provisions of the Foreign Exchange Management Act and Hon'ble Supreme Court's judgment, I am of the considered view that even though the appellant received the payment in Indian rupees but the same is deemed to be convertible foreign exchange and accordingly the condition as provided under Rule 3(ii) of Export of Service Rules, 2005 stand complied with. The appellant filed the appeal in respect of the total amount of Rs. 12,62,158/-. However, from the Order-in-Appeal, I find that an amount of Rs. 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 s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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