The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), ruled that the relevant date must be date of realization of foreign exchange in case of export of services.
The appellant,M/s. MiramedAjuba Solutions Pvt. Ltd, is a wholly owned subsidiary of Ajuba Solutions Mauritius Limited, which in turn is a wholly owned subsidiary of M/s. Ajuba International ICC. The appellants are 100% Export Oriented Unit (EOU) and got registered with the Software Technology Parks of India (STPI).
In respect of the service tax paid on input services used for export of the above-mentioned services, they had filed for Refund of unutilized Cenvat Credit for eight quarters spanning from July 2012 to September 2014 under Rule 5 of the Cenvat Credit Rules, 2004 read with Notification No. 27/2012-CE dated 18.06.2012.There were eight Show Cause Notices issued to the appellants proposing to reject the above refund claims and after due process of law, the lower appellate authority rejected the refund claims.
The main issue involved in these appeals is whether the refund claims filed by the appellants are time barred or not, in terms of the provisions of Section 11 B of the Central Excise Act, 1944 read with Notification No. 27/2012 –CE (NT) dated 18.06.2012.
M. Karthikeyan counsel for the appellants has relied on the decision of the CESTAT’s Larger Bench in the case of CCE & GST, Bengaluru Service Tax-I Vs. M/s. Span InfoTech (I) Pvt Ltd, wherein it has been held that the relevant date of filing refund claim under Rule 5 of the Cenvat Credit Rules may be taken as the end of the quarter in which the FIRC is received, in cases where the refund claims are filed quarterly.
The Advocate submitted that the eligibility of cenvat credit cannot be examined during the processing of refund claims and this should have been ideally done by the Proper Officer under Rule 14 of Cenvat Credits Rules, 2004 read with Section 73 of the Finance Act, 1994.
The Coram consisting of P Dinesha, Judicial Member and Vasa Seshagiri Rao, Technical Member observed that “Since the Notification No. 27/2012 –CE (NT) dated 18.06.2012 required the claim to be made before the expiry of a period specified under Section 11 B and this Section does not specify what is the relevant date in case of export of services, the Tribunal has, in a series of decisions, held that relevant date in case of export of services is the date of realization of the foreign exchange.”
“The reason for this is the export of services is not complete unless the foreign exchange is realized as per Rule 3 (2) (b) of export of services Rules, 2005. Therefore, unless the foreign exchange is realized, the export is not complete and therefore the relevant date must be the date of realization of foreign exchange” the Tribunal opined.
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