Custom, Excise & Service Tax Tribunal
M/S Clearpoint Learning Systems ... vs Commissioner Of Central Excise, ... on 16 July, 2014
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. IV Appeal No. ST/80 & 698 to 700/11 (Arising out of Order-in-Appeal No. P-III/VM/283/2010 dated 2.11.2010 passed by the Commissioner of Central Excise & Service Tax (Appeals), Pune-III). For approval and signature: Honble Shri Anil Choudhary, Member (Judicial) ======================================================
1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it should be released under Rule 27 of the : Yes CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordships wish to see the fair copy : Seen of the order? 4. Whether order is to be circulated to the Departmental : Yes authorities? ====================================================== M/s Clearpoint Learning Systems (India) Pvt. Ltd. Appellant Vs. Commissioner of Central Excise, Pune-III Respondent Appearance: Shri Parag Phanse, Company Secretary for Appellant Shri B.K Iyer, Supdt. (AR) for Respondent CORAM: SHRI ANIL CHOUDHARY, MEMBER (JUDICIAL) Date of Hearing: 16.07.2014 Date of Decision: 16.07.2014 ORDER NO. Per: Shri Anil Choudhary
The appellant, M/s Clearpoint Learning Systems (India) Pvt. Ltd., have filed these four appeals for different periods against Orders-in-Appeal No. P-III/VM/283/2010 dated 2.11.2010 and others passed by the Commissioner of Central Excise & Service Tax (Appeals), Pune-III wherein he has upheld the total/partial disallowance of refund claim under Rule 5 of the Cenvat Credit Rules, 2004 on the ground of limitation. The details of the refund claim are as under: -
Appeal No. of Tribunal Period OIA NO.
Amount Claimed Amount Sanctioned Amount Disallowed ST/698/11 May to June, 2008 P-III/RS/265/011 dt. 22.9.2011 22,390
-
22,390 ST/699/11 July to Sept, 2008 P-III/RS/266/2011 dt. 22.9.2011 50,160
-
50,160 ST/700/11 Oct to Dec, 2008 P-III/RS/267/2011 dt. 22.9.2011 131,541
-
131,541 ST/80/11 Jan to March, 2009 P-III/VM/283/ 2011 dt. 2.11.2010 269,894 108,583 161,311 Total 473,985 108,583 365,402
2. The appellant is registered with Service Tax department as a service provider under the category of Information Technology Software Services. The appellant exports 100% of its services to its clients outside India. The appellant takes CENVAT Credit of the input services utilized for rendering the output services. As export of service is not taxable service, the appellant being unable to utilize the CENVAT Credit taken, applied for refund. Vide Orders-in-Original dated 30.4.2010 and others passed pursuant to hearing the appellant, total/part of the claim was rejected on the ground that relevant date (for limitation) is one year from the date on which the services leave/exported from India considering the invoice date as the date of export, whereas the appellant has filed refund claim after more than 12 months from the date of export of service. Accordingly, the part or full claim was held time barred and it was disallowed. Being aggrieved the appellant preferred appeals before the Commissioner (Appeals). Part of the refund was also rejected for non-production of relevant input service invoices. The learned Commissioner (Appeals) agreeing with the finding of the adjudicating authority, dismissed the appeals. Being aggrieved the appellant has preferred appeal before this Tribunal.
3. Before this Tribunal, the only ground, the appellant has raised is regarding rejection of his claim on the ground of limitation. The appellant states that no limitation is applicable in the case of refund of CENVAT Credit on account of export. He further relies on the ruling of the Hon'ble Karnataka High Court in the case of mPortal India Wireless Solutions (P) Ltd. Vs. Commissioner of Service Tax 2011 (9) TMI 450-KHC wherein by order dated 23.9.2011, the Hon'ble High Court held that limitation under Section 11B does not apply to refund of accumulated CENVAT Credit. Therefore, bar of limitation cannot be a ground to refuse refund of CENVAT Credit to the assessee. Following the ruling of Hon'ble Karnataka High Court, the Division Bench of this Tribunal (in which I was also a Member) in the case of KPIT Cummins Infosystems Ltd. Vs. Commissioner of Central Excise, Pune-I 2013 (7) TMI 124 (CESTAT-Mum) has held that bar of limitation cannot be a ground to refuse refund of CENVAT Credit in case of export of service. Further, from plain reading of Rule 3(2) of the Export of Service Rules, it is apparent that export of service is complete on the happening of both the events i.e. export of service from India and receipt of convertible foreign exchange in India. Unless the transaction is completed as per Rules, there cannot be a claim for refund of CENVAT Credit on account of export of service. Therefore, the relevant date taken by the Revenue, as the date of invoice, being date of service is palpably wrong. The relevant date for the export of service will be the date on which the convertible foreign exchange is received in India.
4. It is further argued that Rule 5 of Cenvat Credit Rules provides for refund on the satisfaction of the additional condition being where for any reasons such adjustment is not possible, the manufacturer/provider shall be allowed refund. Thus, the person/assessee, only on satisfying the condition that input credit cannot be adjusted due to nature of his business, will be entitled to refund. Further, no time limit is prescribed under Rule 5 of the Cenvat Credit Rules and rightly so in view of the condition precedent.
5. The appellant further relies on the ruling of Hon'ble Madhya Pradesh High Court in the case of S.T.I. India Ltd. Vs. Commissioner of Central Excise 2009 (236) ELT 248, wherein refund was preferred under clause 6 of appendix to Notification issued under Rule 57F of the Central Excise Rules, 1944. It was held that the provision is procedural in nature and not mandatory, hence merely because the refund application is not strictly filed within specified period, read with Section 11B, could not have been made the sole ground of rejection. It was also held that the claim of refund under Rule 57F did not strictly fall within the four corners of Section 11B, but it essentially fall under clause 6 of appendix to Notification under Rule 57F. Thus, refund could not have been rejected on limitation.
6. The learned AR appearing for the Revenue reiterates the findings of the lower authorities and also relies on the ruling of the Hon'ble Madras High Court in the case of Commissioner of Central Excise Vs. GTN Engineering (I) Ltd. 2012 (281) ELT 185 (Mad) wherein by order dated 25.8.2011 the Hon'ble High Court in the case of export of goods has held that even though Section 11B of Central Excise Act does not cover refund of CENVAT Credit, Notification No. 5/2006-CE makes it applicable for that purpose and relevant date for computing one years limitation is to be determined by applying Rule 5 of Cenvat Credit Rules, 2004. Though Rule 5 of Cenvat Credit Rules does not prescribe any specific relevant date, it has to be the date on which final products are cleared for export and further found that the view of CESTAT that no limitation is applicable for refund of CENVAT Credit is incorrect. Thus, he prays for rejecting the appeal.
5. Having considered the rival contentions and following the ruling of the Division Bench of this Tribunal in the case of KPIT Cummins Infosystems Ltd. (supra),and Hon'ble M.P. High Court in STI India Ltd. (supra), I hold that limitation will not apply for claim of refund of CENVAT Credit in case of export of service in terms of Section 11B of the Central Excise Act read with Rule 5 of the Cenvat Credit Rules. Further, it is held that the relevant date, if any, for the purpose of Section 11B for refund of CENVAT Credit in case of export of service will be one year from the date of receipt of remittance for the services rendered to the recipient of service outside India. Thus, the appeals are allowed with consequential relief. The adjudicating authority is directed to grant refund other than or rejected amount for non-production of input invoices, as per the Order-in-Original.
(Dictated and pronounced in Court) (Anil Choudhary) Member (Judicial) Sinha 1