Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise, ... vs Navistar International Pvt. Ltd on 1 December, 2015
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
COURT NO.
Appeal No. ST/87735/2014
(Arising out of Order-in-Appeal No. PUN-EXCUS-003-APP-365-13-14 dt. 13.02.2014 passed by the Commissioner (Appeals) Central Excise, Pune-III )
For approval and signature:
Honble Shri Ramesh Nair, 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 : No
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?
======================================================
Commissioner of Central Excise, Pune-III
:
Appellant
VS
Navistar International Pvt. Ltd.
:
Respondent
Appearance
Shri B. Kumar Iyer Supdt. (A.R.) for Appellant
Shri Prasad Paranjpe, Advocate for respondent
CORAM:
Honble Shri Ramesh Nair, Member (Judicial)
Date of hearing : 1/12/2015
Date of pronuncement: 22/03/2016
ORDER NO.
The appeal is directed against Order-in-Appeal No.PUN-EXCUS-003-APP-365-13-14 dt.13.02.2014 passed by the Commissioner (Appeals) Central Excise, Pune-III whereby the Ld. Commissioner has allowed the appeal filed against Order-in-Original No.R/459/STC/PIII/2013 dt. 23.09.2013.
2. The issue to be decided by me is-
(i) Whether the turnover in respect of services provided/exported prior to 1.4.2012 should be deducted from the export turnover as well as total turnover for arriving at the ratio for eligible refund under Rule 5 of the Cenvat Credit Rules 2004.
(ii) Whether in case the consideration for the services exported was received on 9.4.2012 and the refund of April and June 2012 quarter was filed on 26.4.2013 is within time or otherwise.
The original authority in the Order-in-Original contended that in respect of 10 invoices, for the services provided for export is prior to 1.4.2012. Since the payment was received on 9.4.2012 and the refund was filed on 26.4.2013, the turnover pertaining to the said 10 invoices was deducted from the export turnover while retaining the same turnover in the total turnover and accordingly rejected the refund of Rs.40,13,163/-. The adjudicating authority also held that since the refund was filed beyond 1 year for the date of receipt of foreign exchange, the same is time barred. Aggrieved by the Order-in-Original the respondent filed appeal before the Commissioner (Appeals), the Commissioner (Appeals) on both the counts allowed the appeal of the respondent. Aggrieved by the impugned order, the Revenue is before me.
3. Shri B. Kumar Iyer, Ld. Supdt. (A.R.) appearing on behalf of the Revenue reiterating the grounds of appeal submits that for considering the export turnover of services, the main criteria is the payment received against the export. In the present case though the services were exported before 1.4.2012 but the payment was received after 1.4.2012. Therefore exports in respect of 10 invoices should be considered as export for the quarter April 2012 to June 2012. Therefore, the same could not have been deducted from the export turnover, thus the Ld. Commissioner has made an error. As regard time bar, he submits that as per Section 11B refund claim should be filed before the expiry of 1 year and there is no exception provided under Section 11B, whether the claim is required to be filed monthly or quarterly. Therefore the period of 1 year will apply in each and every case of refund claim.
4. On the other hand, Shri Prasad Paranjpe, Ld. Counsel for the respondent submits that Rule 5(2) of Cenvat Credit Rules, 2004 makes it clear that the new provisions of the formula based computation of the refund prescribed under the amended Rule 5 of the CCR is applicable only w.e.f . 1.4.2012 and it does not apply to services exported prior to 1.4.2012, for the purpose of determining the definition of Export of Service as defined in Explanation 1 to Rule 5 of the Cenvat Credit Rules. Accordingly, irrespective of the date of receipt of consideration, the services provided/exported prior to 1.4.2012 will not be governed by new Rule 5 of the CCR read with Notification No.27/2012 CE(NT) dated 18.06.2012. He submits that the present refund is for the period April-June 2012 which is filed under new Rule 5 of CCR . Accordingly, the Ld. Commissioner (Appeals) has rightly held that the turnover with respect to the 10 invoices which is for the export of service prior to 1.4.2012 should not be considered for granting refund for the period April June 2012 as the said invoices specifically stand excluded due unamended Rule 5(2) of Cenvat Credit Rules. Therefore, the Ld. Commissioner (Appeals) rightly ignored turnover of these invoices from the export turnover as well as total turnover. In this support, he placed reliance on this Tribunals order in the case of Computerland UK Ltd. (Final Order No. A/935-936/15/SMB dated 13.04.2015). As regard limitation aspect, he submits that since the consideration is received on 9.4.2012 and the refund is filed on 26.04.2013, the same was filed within 1 year from the quarter end i.e. 30.6.2012. He further submits that it is the condition in the Notification that one single claim for each quarter is required to be filed. Therefore the period of refund shall end on 30.6.2012 and from that day 1 year is available for filing the refund, therefore the refund is well within the time.
5. I have carefully considered the submissions made by both the sides. The issue lies in the narrow compass. The amended rule is applicable only for the exports taken place on or after 1st April 2012. The Ld. Commissioner has deducted the value of 10 invoices from the export turnover as well as from the total turnover of quarter April 2012 to June 2012, for the reason that exports made before 1.4.2012 is governed by the un amended Rule which shall not apply retrospectively on the export made prior to 1.4.2012. Therefore in my considered view the Ld. Commissioner has rightly deducted the value of 10 invoices pertaining the period prior to 1.4.2012 from export turnover as well as total turnover for the period April June 2012. As regard limitation, when in the Notification issued under Rule 5 it is a condition that the assessee has to file refund only once in a quarter. Accordingly, he is not allowed to file refund before quarter is completed, in that case, the relevant date for computing 1 year for the purpose of Section 11B shall be from 30.6.2012. In the present case, the respondent filed refund claim on 26.4.2012 i.e. within 1 year from 30.6.2012, hence the same is clearly within 1 year as provided under Section 11B. The Ld. Commissioner has rightly held that the refund is within the stipulated time period of 1 year. On both the counts, Ld. Commissioner (Appeals) has given detail finding interpreting the pre-amended and post amended Rule 5 in the notification issued there under the relevant findings are reproduced below:
16. Applying the provisions described in Para 15 above on the present case, I find that the Appellant have included 10 invoices, viz. Invoice No. 011/2011-12 dated 29.02.2012, 012/2011-12 dated 31.03.2012, 001PPT/2011-12 dated 31-08-2011, 002PPT/2011-12 dated 30.09.2011, 003PPT/2011-12 dated 31-10-2011, 004PPT/2011-12 dated 30-11-2011, 005PPT/2011-12 dated 31-12-2011, 006PPT/2011-12 dated 31-01-2012, 007PPT/2011-12 dated 29-02-2012 and 008PPT/2011-12 dated 30-03-2012, in the present refund claim on the ground that payments in respect of the same were received on 09-04-2012. However, the export of services covered by the said invoices had been completed prior to 31.032012, as reflected in the date of issuance of the said invoices. As provisions of new Rule 5 of the CCR are applicable to the exports made on or after 01-04-2012, the exports covered by the said 10 invoices issued prior to 01-04-2012 have to be excluded from the present refund claim for the quarter of April 2012 to June 2012, by virtue of new Rule 5(2) of the CCR read with clause (1) of Explanation 1 given under new Rule 5 of the CCR. This being a categorical statutory provision, it will prevail over any possible interpretation. For calculating export turnover of the services and total turnover of services for the relevant quarter of April to June 2012, only those services which were exported between 01.04.2012 and 30.06.2012 need to be considered and the same is calculated in the following para. Further, it is clear from the figures mentioned in the Order-in-Original that the Appellant had exported their entire turnover and had not provided any services to Domestic Tariff Area in the relevant period. Therefore, the export turnover would be equal to the total turnover, in terms of clause (E) of Rule 5 (1) of the CCR.
17. In view of the above discussion, I find that the admissible refund amount needs to be re-calculated. The same is done as under:
Export turnover of services = 1,32,78,343/-
Total Turnover=1,32,78,343/-
Net CENVAT Credit=48,63,911/-
Refund
amount =Export turnover of services X Net CENVAT Credit Total turnover
1,32,78,343 X 48,63,911
1,32,78,343 = 48,63,911/-
Since refund of Rs. 8,50,750/- has already been granted vide the impugned Order-in-Original, the appellant are found entitled to further refund of Rs. 40,13,161/- only (48,63,911/- minus 8.50,750/-).
18. In view of the above findings, I pass the following order:
ORDER
The Order-in-Original No. R/459/STC/PIII/2013, dated 23.0902013 passed by the Deputy Commissioner, Service Tax Cell, Pune-III Commissionerate is modified and further refund of Rs.40,13,161/- is allowed with consequential relief. The present appeal is allowed in toto.
From the above detail finding of the Commissioner (Appeals), and my discussion made herein above I do not find any infirmity in the impugned order. I, therefore upheld the impugned order and dismiss the Revenues appeal.
(Pronounced in court on 22/03/2016) (Ramesh Nair) Member (Judicial) SM.
7Appeal No. ST/87735/2014