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CCE & CST, Bengaluru Service Tax-I Versus M/s. Span Infotech (India) Pvt. Ltd.

2018 (2) TMI 946 - CESTAT BANGALORE

Refund claim - time limit - Section 11B of the Central Excise Act, 1944 - whether the time limit prescribed under Section 11B in respect of filing of refund claims is to be applied from the date of receipt of payment for export of services or can be considered from the end of the quarter in which such payments have been received? - Held that: - there is a specific condition that the refund claims are required to be filed within the period specified under Section 11B. Consequently, completely .....

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note that export of services is completed only with receipt of the consideration in foreign exchange. Consequently, the date of Foreign Inward Remittance Certificate (FIRC) is definitely relevant. - In respect of export of services, the relevant date for purposes of deciding the time limit for consideration of refund claims under Rule 5 of the CCR may be taken as the end of the quarter in which the FIRC is received, in cases where the refund claims are filed on a quarterly basis. - The .....

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ri Deepak Jain, Shri Teja, Shri Shekar, Shri S. Annamalai, Shri K.S. Naveen Kumar, Shri Sreekanth For the Assessees Dr. J. Harish, Dy. Commissioner(AR) Shri N. Jagadish, Superintendent(AR) For the Revenue ORDER Per : V. Padmanabhan The Hon ble President has constituted this Larger Bench on the basis of the reference made by the Hon ble Single Member vide his Interim Order No.33/2017 dt. 19/09/2017. In the said reference, the learned Single Member observed as follows:- When this matter was called .....

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It was brought to my notice by the Bar that the Bench at Bangalore by Final Order No.21636-21640/2017 dt. 05/04/2017 has held that provisions of Section 11B will be applicable from the date of receipt of payment for export of services, despite there being a condition mentioned for filing of refund claims once in a quarter and held that time period of one year from the end of quarter is inapplicable in view of the judgment of Hon ble High Court of Madras in the case of CCE Vs. GTN [2012(281) ELT .....

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filing of the one refund claim at the end of a quarter, while the Division Bench of the Tribunal has considered the said condition. 3. In my view, the decision of Single Member Bench dt. 05/04/2017 has not considered view as has been arrived by the Division Bench in the case of Sitel India Ltd. As numerous appeals are pending in this Bench on this point of computation of time limit whether should be from the date of FIRC only or from the end of quarter of export of services and there being dive .....

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ed CENVAT credit if the same cannot be adjusted towards payment of duty of excise or service tax. The refund is to be allowed subject to the safeguards, conditions and limitations as specified by the Central Government. For this purpose, the Government initially issued Notification No.5/2006-CE(NT) dt. 14/03/2006 specifying the relevant conditions. Rule 5 of the CCR was amended w.e.f. 01/04/2012. The Notification No.5/2006 was also superseded by issue of Notification No.27/2012-CE(NT) dt. 18/06/ .....

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ims may be made before the expiry of the period specified in Section 11B of the Central Excise Act, 1944.(CEA) In Notification No.27/2012, such specification is found in para 3(b). The learned counsel submitted that Section 11B of the CEA provides for a time limit of one year from the relevant date . But when the definition of relevant date is considered as per sub-clause 5(B) of Section 11B, it may be seen that in sub-clause (a) which is in respect of goods exported, the relevant date has been .....

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e service provider in convertible foreign exchange. Even for the earlier period when the Service Tax Rules, 1994 was in vague. Erstwhile Rule 6A specified the same condition. The learned counsel argued that in view of the above, relevant date for export of services should be taken as the date of receipt of the consideration in foreign currency which is evidenced by FIRC. He further submitted that an amendment to this effect was carried out subsequently by the Government in Notification No.27/201 .....

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benefit retrospectively. But the provision imposing burden or liability can be viewed only prospectively. He finally summed up his argument and submitted that the beneficial interpretation should be extended to the assesses as held by the Division Bench of the Tribunal in the case of CST, Mumbai-II Vs. Sitel India Ltd. [2016-TIOL-818-CESTAT-MUM] where the Bench held that refund claims can be filed within one year from the end of the quarter irrespective of the date of receipt of FIRCs in that q .....

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f mPortal India Ltd. [2012(27) STR 134 (Kar.)]. and submitted that provisions of Section 11B of the Act itself will be inapplicable for refund under Rule 5 of CCR. 6. Shri S. Ananthan, learned Chartered Accountant submitted that the provisions of Section 11B must be read and interpreted strictly. This Section applies only to a refund of excise duty or output service tax and does not apply to refund of unutilized CENVAT credit which is wholly governed by Rule 5 of CCR. Accordingly he submitted th .....

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all be filed before the expiry of the period specified in Section 11B ibid. Accordingly, he submitted that the time limit specified in Section 11B cannot be ignored. ii. The relevant date for determining the one year time limit under Section 11B is specified clearly in respect of export of goods. However the same has not been done in respect of export of services. However, in this connection, the amendment carried out in Notification No.27/2012 by Notification No.14/2016(NT) dt. 01/03/2016 is re .....

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ice had been completed prior to receipt of such payment; or (b) issue of invoice, where payment for the service had been received in advance prior to the date of issue of the invoice. . iii. Since export of services is completed only with receipt of payment in foreign exchange, the date of such receipt may be taken as the relevant date for export of services. He submitted that there is no justification for extending this date till the end of the quarter. iv. In respect of export of goods, the re .....

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8. We have heard all connected parties in great length and perused the connected records. In the interest of bringing clarity to the issue on hand, we ignore the objection raised on jurisdiction and proceed to decide the issue on merit. 9. Rule 5 of the CENVAT Credit Rules, 2004 provides for refund of unutilized CENVAT credit, even after adjustment of the same for payment of duty of excise or service tax. The conditions, safeguards and limitations for consideration of such refund claims have bee .....

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ions specifying relevant date under Section 11B do not cover the case of export of services. Further the exporters of services have been given the option to file claims for such refunds once in a quarter and in respect of 100% EOUs, once in a month. The issue referred to Larger Bench is whether the time limit prescribed under Section 11B in respect of filing of refund claims is to be applied from the date of receipt of payment for export of services or can be considered from the end of the quart .....

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Hon ble High Court has disagreed with the view expressed by Hon ble Karnataka High court in the case of mPortal (supra) that Section 11B will have no application with respect to refund under Rule 5 of CCR. 11. The definition of relevant date in Section 11B does not specifically cover the case of export of services. Hence, it is necessary to interpret the provisions constructively so as to give it meaning such that the objective of the provisions; i.e. to grant refund of unutilized CENVAT credit .....

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