Custom, Excise & Service Tax Tribunal
Commissioner Of Customs & Central ... vs M/S. Ratio Pharma India Pvt. Ltd on 22 June, 2015
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. II APPEAL NO. ST/598/12-MUM [Arising out of Order-in-Appeal No. GOA/CEX/GSK/16/2012 dtd. 24/2/2012 passed by the Commissioner (Appeals) Central Excise & Customs, Goa] For approval and signature: Honble Mr 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 :
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 Customs & Central Excise, Goa
:
Appellants
VS
M/s. Ratio Pharma India Pvt. Ltd.
:
Respondent
Appearance
Shri. B.K. Iyer, Superintendent (A.R.) for the Appellants
Shri. C.S. Birasdar, Advocate for the Respondent
CORAM:
Honble Mr. Ramesh Nair, Member (Judicial)
Date of hearing: 22/6/2015
Date of decision: 22/6/2015
ORDER NO.
Per : Ramesh Nair
This appeal is directed against Order-in-Appeal No. GOA/CEX/GSK/16/2012 dtd. 24/2/2012 passed by the Commissioner (Appeals) Central Excise & Customs, Goa, wherein the Ld. Commissioner(Appeals) dismissed Revenues appeal and upheld the order in original.
2. The facts of the case is that the respondent is engaged in providing the service of research and development to foreign clients, accordingly they are registered with the service tax department. Respondent have paid service tax on the input service and Central Excise duty on input used in the rendering output service. Since the respondent are not in position to utilize the credit they have filed refund claim with the department under Rule 5 of the Cenvat Credit Rules, 2004. The refund claim was for the Quarter 1st April 2008 to 30th June, 2008 in respect of export made starting from invoice No. RPIN/EOU/2008/16 dated 21/4/2008. The refund claim for an amount of Rs. 5,97,244/-, was filed on 15/4/2009. The Asstt. Commissioner vide order-in-original No. ACCEX(Div. II)93-R/11-12 dated 9/6/2011 sanctioned the refund claim. Aggrieved by the said order, Revenue filed appeal before the Commissioner(Appeals), which was dismissed by the Commissioner(Appeals) therefore the Revenue is before me.
3. Shri. B.K. Iyer, Ld. Superintendent (A.R.) appearing on behalf of the Revenue reiterates the grounds of appeal. He submits that in respect of two invoices covered under invoice No. EOU/2008/033 dated 27/6/2008 and invoice No. EOU/2008/037 dated 30/6/2008, it was clearly mentioned that the services were provided for export in the year 2007 and therefore in respect of these two invoices the refund is clearly time bar. He placed reliance on the following judgments:
(a) Affinity express India Pvt. Ltd. Vs. Commissioner of C. Ex. Pune-I[2015(37) S.T.R. 321(Tri. Mum)]
(b) Commissioner of Central Excise, Coimbatore Vs. GTN Engineering (I) Ltd.[2012(281)E.L.T. 185 (Mad.)].
In view of the above judgments, It has been held that the limitation provided under Section 11B shall be applicable in case of refund under Rule 5 of CCR, 2004 and the notification issued thereunder.
4. On the other hand, Shri. C.S. Biradar, Ld. Counsel for the respondent submits that except the aforesaid two invoices, other invoices were raised in the year commencing April, 2008 in respect of services also provided in the quarter April, 2008 June, 2008. He submits that even in respect of these two invoices though the services was provided in the year 2007 but invoices of such services raised in the quarter April, 2008 June, 2008 only. He further submits that in case of export of service, the export shall complete not only at the time of providing the services and not even under date of issuance of invoices but only when remittance against such export are received in convertible foreign exchange. He refers to the Export of Services Rules, 3(2), according to which the export of services is completed when the following condition are fulfilled:
(a) Services provided from India and use outside India.
(b) Payment of such services received by the service provider in convertible foreign exchange.
It is his submission that unless both the conditions are fulfilled the export is not completed. In the present case though certain services were provided in the year 2007 and remaining were provided in the quarter April, 2008- June, 2008 but value of remittance in respect of the services were received by the respondent during 5/8/2008 to 19/11/2008 which can be seen from the FIRCs against all the invoices covered under subject refund claim. He placed reliance on the following judgments;
(a) Bechtel India Pvt Ltd. Vs. CCE. Delhi[2014(34) S.T.R 437 (Tri. Delhi)]
(b) CCE, Pune-I Vs. Eaton Industries Ltd [2011(22) S.T.R. 223 (Tri. Mum)]
(c) CCE, ST, Hyderabad Vs. Hyundai Motor India Engineering (P) Ltd. [2015-TIOL-739-HC-AP-ST].
It is his submission that in above judgments, it has been held that the export of services becomes complete only after realization of convertible foreign exchange against the services provided to a person located in foreign country.
5. I have carefully considered the submissions made by both sides and perused the record.
6. From the facts, I observed that the Revenues grievances is that the period of limitation should be reckoned from the date of export of services. However, I find that only in respect of two invoices the services were provided in the year 2007 therefore if at all appeal to be filed by the Revenue, it could have been restricted to the said two invoices only. Raising all the invoices as well as services pertains to the period quarter April, 2008 June, 2008 in respect of such claims even the contention of the Revenue is not correctly applicable. Now issue to be decided is the relevant date of export of services and whether the refund is beyond the limitation provided under Section 11B which is applicable in case of refund claim under Rule 5 of CCR, 2004. First of all it is to be ascertained what is the date of export in respect of export of services for which I refer Rule 3(2) of Export of Services Rules, 2005, which is reproduced below:
[(2) The provision of any taxable service specified in sub-rule (1) shall be treated as export of service when the following conditions are satisfied, namely:-
(a) such service is provided from India and used outside India; and
(b) payment for such service is received by the service provider in convertible foreign exchange.
Explanation.- For the purposes of this rule India includes the designated areas in the continental shelf and Exclusive Economic Zone of India as declared by the notifications of the Government of India in the Ministry of External Affairs numbers From the above rules, it is clear that the export of service shall complete only when the (a) services is provided from India and use outside India (b) payment of such services is received by the service provider in convertible foreign exchange. In the present case it is undisputed fact that though the part of the services provided in the year 2007 and part of the services provided in the quarter April, 2008-June,2008 but remittance in convertible foreign exchange were admittedly received by the service provider during 5/8/2008 to 19/11/2008 therefore even applying Section 11B one year period expire on 5/8/2009 whereas the refund was admittedly filed on 15/4/2009 that is well within the one year time period as provided under Section 11B therefore the refund claim is not liable for rejection on time bar. The issue that, what is the relevant date of export in respect of services in the following judgments it was held as under:
Bechtel India Pvt Ltd
7.?On going through above provisions for claiming refund under Rule 5 of the Cenvat Credit Rules, 2004, output is required to be exported in accordance with procedure laid down in Export of Service Rules, 2005 (as per condition 1 of the Appendix to Notification 5/2006), once service is exported refund claim can be filed subject to limitation as prescribed under Section 11B of the Act. In the instant case export of service is complete only when foreign exchange is received in India as per Export of Service Rules, 2005 (i). In the Section 11B, relevant date for refund of export of goods is date of export. Section 11B is made applicable for claiming refund under Rule 5 of the Cenvat Credit Rules as per condition 6 of Notification 5/2006. In case of export of Services, export is complete only when foreign exchange is received in India. Therefore relevant date of export of services is date of receipt of foreign exchange. In the present case all the four claims have been filed within 1 year from the date of receipt of foreign exchange and are therefore filed in time and cannot be held as time barred.
Eaton Industries Ltd
6.?Rule 3(2) of the Export of Services Rules, 2005 are reproduced hereunder :-
(2)?The provision of any taxable service specified in sub-rule (1) shall be treated as export of service when the following conditions are satisfied, namely :
(a)?[***]
(b)?payment for such service [***] is received by the service provider in convertible foreign exchange.
7.?From the above provisions, it is very much clear in the case of export of service, the relevant date is the date when the payment of service exported has been received by the assessee.
8.?In the instant case the lower appellate authority has also held that in the case of export of service the relevant date is the date when the assessee has received the payment of service exported and within one year from the date of receipt of the payment of service exported, the assessee is required to file the refund claim.
9.?Accordingly, I do not find any infirmity with the finding of the lower appellate authority on this ground. Hence, the appeal filed by the revenue deserves no merit therefore is rejected.
Hyundai Motor India Engineering (P) Ltd.
3. It appears the learned CESTAT decided the first issue relying on the judgment of the Bombay Bench of the Tribunal in the case of C.C.E., Pune -I v. Eaton Industries P. Ltd. 2011 (22) S.T.R. 223 (Tri.- Mumbai) = 2011-TIOL-166-CESTAT-MUM to hold that the relevant date for calculating the time limit for grant of refund would be the date of receipt of consideration and not the date when the services were provided. If the date of receipt of consideration is reckoned then the claims are perfectly within time limit, and if date of rendering services is taken then obviously most of the claims would be time barred. The Tribunal has held that the relevant date would be the date of receipt of consideration and, when such decision has not been appealed against nor it has been reversed or overruled by any superior forum, the said judgment is binding. The learned CESTAT recorded no contrary decision. However, learned counsel for the appellant - Revenue asserts before us that a contrary decision has been rendered in the year 2014 by the Bombay Bench of the Tribunal. Unfortunately that judgment referred was neither produced before the Tribunal nor before us and even case number or cause title of the same could not be informed by the learned counsel appearing for the appellant. We, therefore, do not find any illegality or infirmity with the order of the learned CESTAT and we agree with the decision rendered by it on the issue.
From the above judgments, it has been categorically held that relevant date specified under Section 11B of Central Excise Act, 1944 shall be reckoned from the date of receipt of payment in convertible foreign exchange. As regard the reliance placed by the Ld. A.R., I find that the case of Affinity express India Pvt. Ltd has been dealt in the judgment of Hyundai Motor India Engineering (P) Ltd. by the Honble Andhra Pradesh High court therefore the same stands overruled. As regard the judgment of GTN Engineering (I) Ltd, I find that the fact in that case was the export of goods, and in case of export of goods the relevant date is date of export as per the provision of Section 11B of Central Excise Act, 1944. In the present case, it is a case of refund under Rule 5 in respect of export of services for which export has been defined in the Export of Service Rules, 2005. Section 11B only specifies one year period from the relevant date and relevant date is not same in respect of goods as well as services. Since the fact of the present case is different from the case of GTN Engineering (I) Ltd, the same is not applicable. In view of the above discussion, I find that Ld. Commissioner (Appeals) has rightly allowed the refund to the respondent. I therefore upheld the impugned order and dismiss the Revenues appeal.
(Dictated in court) Ramesh Nair Member (Judicial) sk 9