Custom, Excise & Service Tax Tribunal
Apotex Research P Limited vs C.C,Bangalore-Cus on 18 September, 2014
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE INTERIM ORDER No.79 to 152/2014 (Orders to be served to parties through their representatives) Sl. No. Appeal No. Appellant Respondent1
ST/00100/2008 APOTEX RESEARCH P LIMITED C.C,BANGALORE-CUS 2 ST/00563/2008 DODDANAVAR BROTHERS C.C.,C.E.& S.T,BELGAUM 3 ST/00564/2008 DODDANAVAR BROTHERS C.C.,C.E.& S.T,BELGAUM 4 ST/00565/2008 DODDANAVAR BROTHERS C.C.,C.E.& S.T,BELGAUM 5 ST/00566/2008 DODDANAVAR BROTHERS C.C.,C.E.& S.T,BELGAUM 6 ST/00567/2008 DODDANAVAR BROTHERS C.C.,C.E.& S.T,BELGAUM 7 ST/00568/2008 DODDANAVAR BROTHERS C.C.,C.E.& S.T,BELGAUM 8 ST/00057/2009 PHILIPS ELECTRONICS INDIA LIMITED C.S.T.,BANGALORE-SERVICE TAX 9 ST/00108/2009 PSI DATA SYSTEMS (P) LTD C.S.T.,BANGALORE-SERVICE TAX 10 ST/00740/2009 NASH INDUSTRIES, C.C.E.,BANGALORE-I 11 ST/00957/2009 INGERSOLL-RAND INTERNATIONAL (INDIA) LTD C.S.T.,BANGALORE-SERVICE TAX 12 ST/00511/2010 KNOAH SOLUTIONS PVT LTD C.C.,& C.E. ,HYDERABAD-IV 13 ST/00638/2010 OCWEN FINANCIAL SOLUTIONS PVT LTD C.S.T.,BANGALORE-SERVICE TAX 14 ST/00790/2010 GE INDIA EXPORTS PVT LTD C.C.,C.E.& S.T,HYDERABAD-II 15 ST/00795/2010 BUSINESS PROCESS OUTSOURCING (I) PVT LTD C.S.T.,BANGALORE-SERVICE TAX 16 ST/00796/2010 BUSINESS PROCESS OUTSOURCING (I) PVT LTD C.S.T.,BANGALORE-SERVICE TAX 17 ST/00828/2010 GE MEDICAL SYSTEMS (INDIA) PVT LTD C.S.T.,BANGALORE-SERVICE TAX 18 ST/00829/2010 GE MEDICAL SYSTEMS (INDIA) PVT LTD C.S.T.,BANGALORE-SERVICE TAX 19 ST/00830/2010 GE MEDICAL SYSTEMS (INDIA) PVT LTD C.S.T.,BANGALORE-SERVICE TAX 20 ST/00831/2010 GE MEDICAL SYSTEMS (INDIA) PVT LTD C.S.T.,BANGALORE-SERVICE TAX 21 ST/00832/2010 GE MEDICAL SYSTEMS (INDIA) PVT LTD C.S.T.,BANGALORE-SERVICE TAX 22 ST/00833/2010 GE MEDICAL SYSTEMS (INDIA) PVT LTD C.S.T.,BANGALORE-SERVICE TAX 23 ST/00916/2010 SITEL OPERATING CORPORATION INDIA LTD C.S.T.,BANGALORE-SERVICE TAX 24 ST/01282/2010 INGERSOLL -RAND INTERNATIONAL (INDIA) LTD C.S.T.,BANGALORE-SERVICE TAX 25 ST/01380/2010 TEXAS INSTRUMENTS (INDIA) PVT LTD C.C.E. & S.T.,BANGALORE-LTU 26 ST/01857/2010 INTEL TECHNOLOGY (INDIA) PVT LTD C.C.E. & S.T.,BANGALORE-LTU 27 ST/01870/2010 INTEL TECHNOLOGY (INDIA) PVT LTD C.C.E. & S.T.,BANGALORE-LTU 28 ST/01871/2010 INTEL TECHNOLOGY (INDIA) PVT LTD C.C.E. & S.T.,BANGALORE-LTU 29 ST/01872/2010 INTEL TECHNOLOGY (INDIA) PVT LTD C.C.E. & S.T.,BANGALORE-LTU 30 ST/02239/2010 GENERAL MOTORS INDIA PVT LTD C.S.T.,BANGALORE-SERVICE TAX 31 ST/02240/2010 GENERAL MOTORS INDIA PVT LTD C.S.T.,BANGALORE-SERVICE TAX 32 ST/02305/2010 KYOCERA WIRELESS (I) PVT LTD (NOW MINDTREE WIRELESS PVT LTD ) C.S.T.,BANGALORE-SERVICE TAX 33 ST/02413/2010 GENERAL MOTORS INDIA PVT LTD C.S.T.,BANGALORE-SERVICE TAX 34 ST/02414/2010 GENERAL MOTORS INIDA PVT LTD C.S.T.,BANGALORE-SERVICE TAX 35 ST/02440/2010 AMD INDIA PVT LTD (FORMERLY AMD FAR EAST LTD INDIA BRANCH OFFICE) C.S.T.,BANGALORE-SERVICE TAX 36 ST/01334/2011 SWISS RE-SHARED SERVICES (INDIA) PVT LTD C.S.T.,BANGALORE-SERVICE TAX 37 ST/03124/2012 ADP Pvt. Ltd C.C.,C.E.& S.T,HYDERABAD-II 38 ST/190/2009 ADITYA BIRLA MINACS WORLDWIDE LTD.
CST, BANGALORE 39 ST/373/2009 HEARTLAND INFORMATION AND CONSULTANCY SERVICES PVT. LTD.
CST, BANGALORE 40 ST/964/2009 AMBA RESEARCH (INDIA) PVT. LTD.
CST, BANGALORE 41 ST/27/2010 CC,CE&ST, BELGAUM DODDANNAVAR BROTHERS 42 ST/371/2010 DODDANAVAR BROTHERS CC,CE&ST, BELGAUM 43 ST/522/2010 UBS SERVICES CENTRE (INDIA) PVT. LTD.
CC&CE, HYDERABAD-IV 44 ST/1347/2010 SUN MICROSYSTEMS INDIA PVT. LTD.
CCE&ST, BANGALORE LTU 45 ST/2231/2010 MICROSOFT INDIA (R&D) PVT. LTD.
CST, BANGALORE 46 ST/2305/2010 KYOCERA WIRELESS (I) PVT. LTD. (NOW MINDTREE WIRELESS PVT. LTD.) CST, BANGALORE 47 ST/2511/2010 CST, BANGALORE BUSINESS PROCESS OUTSOURCING (INDIA) PVT. LTD.
48ST/2539/2010 INFOSYS TECHNOLOGIES LTD.
CCE, MUMBAI-II 49 ST/2557/2010 CST, BANGALORE INFOSYS BPO LTD.
50ST/2558/2010 CST, BANGALORE INFOSYS TECHNOLOGY LTD.
51ST/2568/2010 INFOSYS BPO LTD.
CST, BANGALORE 52 ST/704-710, 712-716/2011; ST/1108, 2546/2012 SAI ADVANTIUM PHARMA LTD.
CCE & CC, HYDERABAD-III 53 ST/1449/2011 YODLEE INFOTECH PVT. LTD.
CST, BANGALORE 54 ST/2056,2057/2011 ST/970, 2449, 2450/2012 INTEL TECHNOLOGIES INDIA PVT. LTD.
CCE&ST, BANGALORE LTU 55 ST/204,205/2012 TEXAS INSTRUMENTS (INDIA) PVT. LTD.
CST, BANGALORE 56 ST/875/2012 INFOSYS LTD.
CST, BANGALORE Appearance:
Shri K.S. Ravishankar, Advocate Shri Rajesh Chander Kumar, Advocate Shri G. Shivadass, Advocate Shri Rajesh Kumar, CA Shri Harish Bindu Madhavan, Advocate Shri Deepak Jain, C.A. Shri B.G. Chidananda Urs, Advocate Shri Sankar Bala, C.A., For the appellants/assessees Shri S.K.Singh, Commissioner(AR) Dr. A.K. Nigam, Addl. Commissioner(AR) Shri R. Gurunathan, Addl. Commissioner(AR) Shri S. Teli, Deputy Commissioner(AR) Shri N. Jagdish, Superintendent(AR) For the Revenue CORAM:
HON'BLE SHRI B.S.V.MURTHY, TECHNICAL MEMBER HON'BLE SHRI S.K. MOHANTY, JUDICIAL MEMBER Dates of Hearing: 17/09/2014 & 18/09/2014 Date of Decision: 18/09/2014 Order Per : B.S.V.MURTHY In order to reduce pendency of appeals, it has been decided that appeals involving common issues have to be identified and listed together and decided. Accordingly on 17.09.2014, nearly 192 cases were listed for hearing after examination by the registry and identification of these cases as the one involving the issue relating to refund of CENVAT credit under Rule 5 of CENVAT Credit Rules 2004.
2. To facilitate proper discussion in the Court and submissions and also to speed up the process, a notice was issued by the Tribunal on 12.09.2014 which reads as under:
THE CUSTOMS EXCISE AND SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH, BANGALORE Date: 12/09/2014 NOTICE Nearly 195 cases have been listed for hearing on 17th September 2014 as batch cases. The issue involved according to officers who have put together the cases for hearing is the refund claims under Rule-5 of CENVAT Credit Rules. It is quite possible that some of the refunds may not be under Ruel-5 and would have got included by mistake. Such cases will not be heard and will be posted for subsequent date in due course.
2. When the refund claims by purchasers of flats were considered, a note had been circulated by this Tribunal. This time also all the counsels as well as authorized representatives are requested to come prepared to argue on the following issues and also to come with relevant details so that the time taken for hearing can be reduced and at the same time quality is not compromised.
i) Limitation for the purpose of grant of refund under Section 11B of Central Excise Act
ii) Denial of CENVAT Credit on the basis of nexus and its correctness; Norms for determination of nexus.
iii) Conditions required to be fulfilled as per the Notification Whether it is correct to classify the conditions as substantive and non-substantive. Further conditions under different Notifications.
iv) Eligibility of input service. A statement may be prepared with the following columns and submitted on behalf of each appellant as far as possible.
Name of input service Name of output service Nature of view of input service by assessee Justification for availability of CENVAT credit
v) Eligibility for the benefit of refund under Rule 5 of CENVAT Credit Rules before Notification was issued.
vi) Defects in documents Nature of defect Justification for eligibility or otherwise
3. Bar Association is requested kindly to circulate this note among all their members so that the time taken for dispute resolution is reduced. This may be done today itself.
(B.S.V.MURTHY) Technical Member To
1) The Bar Association
2) A.Rs. with a request to prepare for the hearing and if possible make written submissions available. If special counsel has been appointed for any of the cases, they may be informed to be available and also a copy of this note may be given to them.
3) Notice Board
4) D.R.
3. However subsequently when verification was taken up it was found that some of the cases were not on this issue and they were separated.
4. When the cases were taken up, the learned advocate on behalf of the appellant M/s. Apotex Research Pvt. Ltd. in appeal No. ST/100/2008 submitted that it may not be proper to pass an order on the common issues and thereafter remand the matter to the original adjudicating authority which was the presumption made by the Bench before the hearing started. He submitted that it would be appropriate to decide each case individually. The authorized representatives on behalf of the Revenue submitted that they were not prepared for finalization of appeals in individual cases since a large number of appeals were involved and they were prepared for discussion of common issues identified and that may be raised during the course of hearing. After considering the submissions it was decided that a separate order identifying common/legal issues and rendering decisions on this issues will be passed and thereafter individual appeals will be taken up treating the matters as part heard in the coming days.
5. Thereafter the issues were taken up.
6. Since the issue involves the refund under Rule 5 of CENVAT Credit Rules, and the notifications issued there under, it would be appropriate to reproduce the relevant rules and notification before we proceed further since the same would be referred and discussed.
Refund of CENVAT credit.
Where any input or input service is used in the manufacture of final product which is cleared for export under bond or letter of undertaking, as the case may be, or used in the intermediate product cleared for export, or used in providing output service which is exported, the CENVAT credit in respect of the input or input service so used shall be allowed to be utilized by the manufacturer or provider of output service towards payment of,
(i) duty of excise on any final product cleared for home consumption or for export on payment of duty; or
(ii) service tax on output service, and where for any reason such adjustment is not possible, the manufacturer or the provider of output service shall be allowed refund of such amount subject to such safeguards, conditions and limitations, as may be specified, by the Central Government, by notification:
Provided that no refund of credit shall be allowed if the manufacturer or provider of output service avails of drawback allowed under the Customs and Central Excise Duties Drawback Rules, 1995, or claims rebate of duty under the Central Excise Rules, 2002, in respect of such duty; or claims rebate of service tax under the Export of Service Rules, 2005 in respect of such tax. Provided further that no credit of the additional duty leviable under sub-section (5) of section 3 of the Customs Tariff Act shall be utilised for payment of service tax on any output service. Explanation: For the purposes of this rule, the words 'output service which is exported' means the output service exported in accordance with the Export of Services Rules, 2005. 14th March 2006.
Notification No. 05/2006 - Central Excise (N.T.) G.S.R. (E) In exercise of the powers conferred by rule 5 of the CENVAT Credit Rules, 2004 (hereinafter referred to as the said rules), and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue), No.11/2002 - Central Excise (NT), dated 1st March, 2002, published in the Gazette of India Extraordinary, vide number G.S.R. 150(E), dated 1st March, 2002, the Central Government hereby directs that refund of CENVAT credit shall be allowed in respect of :
(a) input or input service used in the manufacture of final product which is cleared for export under bond or letter of undertaking;
(b) input or input service used in providing output service which has been exported without payment of service tax, subject to safeguards, conditions and limitations, set out in the Appendix to this notification.
Appendix
1. The final product or the output service is exported in accordance with the procedure laid down in the Central Excise Rules, 2002, or the Export of Services Rules, 2005, as the case may be.
2. The claims for such refund are submitted not more than once for any quarter in a calendar year Provided that where,-
(a) the average export clearances of final products or the output services in value terms is fifty percent or more of the total clearances of final products or output services, as the case may be, in the preceding quarter; or
(b) the claim is filed by Export Oriented Unit, the claim for such refund may be submitted for each calendar month.
3. The manufacturer or provider of output service, as the case may be, submits an application in Form A annexed to this notification (Not printed) to the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, in whose jurisdiction,-
(a) the factory from which the final products are exported is situated, along with the Shipping Bill or Bill of Export, duly certified by the officer of customs to the effect that goods have in fact been exported; or
(b) the registered premises of the service provider from which output services are exported is situated, along with a copy of the invoice and a certificate from the bank certifying realization of export proceeds
4. The refund is allowed only in those circumstances where a manufacturer or provider of output service is not in a position to utilize the input credit or input service credit allowed under rule 3 of the said rules against goods exported during the quarter or month to which the claim relates (hereinafter referred to as the given period).
5. The refund of unutilised input service credit will be restricted to the extent of the ratio of export turnover to the total turnover for the given period to which the claim relates i.e. Maximum refund # Total CENVAT credit taken on input services during the given period W export turnover w Total turnover Illustration:
If total credit taken on input services for a quarter = Rs. 100 Export turnover during the quarter = Rs 250 Total Turnover during the quarter = Rs 500 Refund of input service credit under Rule 5 of the CENVAT Credit Rule, during the quarter # 100*250/500 i.e. Rs 50 Explanation: For the purposes of condition no.5,-
1. Export turnover shall mean the sum total of the value of final products and output services exported during the given period in respect of which the exporter claims the facility of refund under this rule.
2. Total turnover means the sum total of the value of,-
(a) all output services and exempted services provided, including value of services exported;
(b) all excisable and non excisable goods cleared, including the value of goods exported;
(c) The value of bought out goods sold, during the given period.
6. The application in Form A, along with the prescribed enclosures and the relevant extracts of the records maintained under the Central Excise Rules, 2002, CENVAT Credit Rules, 2004, or the Service Tax Rules, 1994,in original, are filed with the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, before the expiry of the period specified in section 11B of the Central Excise Act, 1944(1 of 1944).
7. The refund of excise duty or service tax is allowed by the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be.
NOTIFICATION NO. 07/2010 - CX (NT), Dated: February 27, 2010 Sub: Section 3, Rule 5 - Amends notification No.CE (NT) dt.14.03.2006. Form for claiming refund has been amended to align the definition of input service and input in tune with the Cenvat Credit Rules, 2004 and Boards Circular -ST dt.19.01.2010 Form prescribed in the Boards Circular has now been included in the notification. However, rule 5 of CCR still need to be amended to give effect to the amendments.
In exercise of the powers conferred by rule 5 of the CENVAT Credit Rules, 2004 (hereinafter referred to as the said rules), the Central Government hereby makes the following further amendment in the notification of the Government of India in the Ministry of Finance (Department of Revenue), number -Central Excise (N.T.), dated the 14th March, 2006, published vide number G.S.R.156(E), dated the 14th March, 2006, namely:-
In the said notification, in the Annexure, in Form A,-
(i) in the portion beginning with the brackets, letter and word (a) on and ending with the word undertaking, for the words used in, the words used in or in relation to shall be substituted;
(ii) in the portion beginning with the brackets, letter and word (b) on and ending with the words service tax, for the words used in, the words used for shall be substituted;
(iii) the portion beginning with the brackets and letter (A) and ending with the brackets, letter and words (b) Output Services-, and portion beginning with the brackets and letter (B) and ending with the brackets, letter and words (b)Import Services shall be omitted;
(iv) after the heading (D) ENCLOSURES:-, and the entries there under, the following shall be inserted, namely:-
(DD) The Exporter shall give the details in the following Table:
TABLE Details of goods/services exported on which refund of CENVAT credit is claimed (Rs. In lakh) S. No. Details of shipping bill/ Bill of export/export documents etc. Details of CENVAT credit on which refund claimed 1 2 3 No Date Date of export order Goods / service exported Quantity and value of goods exported/ value of services exported Invoice No., date and Amount Name of service provider/ supplier of goods Service tax/ Central Excise Regn.
No. of service provider/ supplier of goods Details of service/ goods provided with classification under Finance Act 1994/ Central Excise Tariff Service tax/ Central Excise duty payable Date and details of payment made to service provider Documents attached to evidence of the amount of service tax paid Total export during the period for which refund is claimed Total domestic clearances during the period for which refund is claimed Total amount of CENVAT claimed as refund (4) (5) (6) (7) The Table shall be certified by a person authorised by the Board of Directors (in the case of a limited company) or the proprietor or any partner (in case of partnership firm) if the amount of refund claimed is less than Rs.5 lakh in a quarter. In case the refund claim is in excess of Rs.5 lakh, the Table shall also be certified by the Chartered Accountant who audits the annual accounts of the exporter for the purposes of Companies Act, 1956 (1 of 1956) or the Income Tax Act, 1961 (43 of 1961), as the case may be. [F. No. 334/1/2010-TRU] (PRASHANT KUMAR) UNDER SECRETARY TO GOVT OF INDIA Note: - The principal rules were notified vide notification no. -Central Excise (N.T.), dated the 14th March, 2006 and were last amended vide notification No-Central Excise (N.T.), dated the 1st March, 2007, published vide number G.S.R. 166(E), dated the 1st March, 2007. CORRIGENDUM GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE NEW DELHI Dated: June 04, 2010 In the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. -Central Excise (Non Tariff), dated the 27th February, 2010 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 123 (E), dated the 27th February, 2010, at page 60, in line 18, for (b) Import Services, read (b) Input Services. [F. No. 334/1/2010-TRU] (K.S.V.V.Prasad) Under Secretary to the Government of India
6.1. Issue No. 1: Whether refund under Rule 5 of CENVAT Credit Rules would be admissible when there was no notification issued prescribing safeguards, conditions and limitation to be fulfilled by issue of a notification by the Government.
The notification was actually issued on 14.03.2006. In some of the cases before us, the refund claims would have been rejected on the ground that the Notification 5/2006 had used the word used in whereas the claim for the refund arose on the ground that such input services had been used directly or indirectly and the claim of the trade was that input service definition was an inclusive definition and further it has also used the word used for for providing the output services. That being the position the rejection of refund claim on the ground that only when the services are used directly for providing output services refund would be available was not correct. However this issue is not required to be dealt with by us because Notification No. 5/2006-CE (N.T) dated 14.03.2006 was retrospectively amended by the Government and instead of words used in the words used for were replaced. Therefore wherever the refund claims have been rejected on the ground that the notification provides the benefit of refund when the inputs have been used in providing the output services will have to be set aside and will have to be reexamined in the light of amendment carried out with retrospective effect by the Government in Finance Act 2010. Therefore wherever the refund has been rejected on the ground of words used in the notification, will have to be remanded to the original adjudicating authority for reconsideration of the eligibility of credit in the light of amendment issued in 2010 with retrospective effect. At this juncture it would be appropriate for us to mention that this Tribunal has also passed a detailed order in the case of CE Gloves Final Order No. 26617-29/2013 dated 09.10.2013. In this order several input services were considered and their admissibility of CENVAT credit vis-`-vis output services rendered by them and in our opinion this is one of the decisions which should be kept in mind by the original adjudicating authorities when they will be considering the refund claims afresh. In addition to the above decisions in the case of M/s. mPortal India Wireless Solutions (P) Ltd. V. CST, Bangalore [2012 (27) S.T.R. 134 (Kar.)] & CCE, Bangalore V. Stanzen Toyotetsu India (P) Ltd. [2011-TIOL-866-HC-KAR-ST] are also relevant since Honble High Court of Karnataka has laid down the law relating to various services which are used for providing output services and their eligibility to refund of CENVAT credit or eligibility of CENVAT credit in respect of those services.
6.2. Issue no. 2: Another issue that arises in the case of refund under Rule 5 is the place of removal which has been a subject matter of dispute in several cases.
Department has taken a view that wherever exports have taken place, the place of removal has to be considered as factory gate and therefore several services including GTA services, have been considered to be not input services at all and eligibility of CENVAT credit has been denied and refund also has been denied. There are several decisions which have been taken subsequent to 2006 wherein the Tribunal has taken a view that wherever exports have taken place on FOB basis, the place of removal has to be considered as port/airport/land customs station. Therefore once place of removal is taken as port/airport/land customs station all the services utilized up to the stage would become eligible for refund under Rule 5 of the balance of CENVAT credit.
6.3. Issue No. 3: Whether CENVAT credit can be refunded under Rule 5 when there was no notification prior to 14.03.2006.
It was submitted by the authorized representatives of the department that the Rule clearly provided that the manufacturer or the provider of output services shall be allowed refund of such amount subject to safeguards, conditions and limitations, as may be specified, by the Central Government by notification. On this ground it was submitted that the benefit could not be allowed since there were several safeguards and conditions and limitations which were prescribed in the notification issued subsequently which are not merely procedural but substantive in nature. In the absence of a notification, the benefit could not have been allowed since the conditions and safeguards were essential parts and they came to be introduced only subsequently. However we find that this issue is no longer res integra and there are already several decisions on this issue and the authorized representatives could not produce any decision in support of the submission that refund is not admissible. One of the decisions taking this view is:
CST, Mumbai V. WNS Global Service (P) Ltd. [2011 (22) S.T.R. 609 (Bom.). Paragraph 9 of this decision is relevant and is reproduced below:
The above finding of the CESTAT cannot be faulted because substituted Rule 5 of the Cenvat Credit Rules, 2004 does not make any distinction between exports made prior to 14.03.2006 or after 14.03.2006. In other words, as per the substituted Rule 5 refund of unutilized Cenvat credit in respect of exports effected in the past is available to the manufacturer as well as provider of output service. Proviso to Rule 5 as it stood prior to the amendment on 14.03.2006 clearly provides that refund of unutilized credit is available to the manufacturer as also by the provider of output service subject to the conditions set out therein. As noted earlier the appellant fulfills all other conditions. Thus, reading the Rule 5 as it stood prior to its amendment, as a whole, it is evident that refund of unutilized credit is allowable not only to manufacturers but also available to providers of output service. This decision was followed in the case of Caliber Point Business Solutions Ltd. Vs. CCE, Belapur [2008-TIOL-693-CESTAT-MUM.] and CCE, Hyderabad-IV Vs. Deloitte Tax Services India Pvt. Ltd. [2008-TIOL-629-CESTAT-Bang.]. Therefore we have to hold that wherever refunds have been rejected on the ground that prior to issue of notification on 14.03.2006 refund is not admissible cannot be sustained and they also need reconsideration in the hands of original adjudicating authority. We also hold that refunds cannot be rejected on the ground that earlier Notification No. 11/2002-Cus. (N.T) dated 01.03.2002 did not allow refund of credit available in respect of input services but limited only to inputs in view of the fact that during that time the rule itself did not provide for refund of credit in respect of input services.
6.4. Issue No. 4: There is also another stand taken by the Revenue that in respect of 100% EOUs, the CENVAT credit cannot be taken at all since the finished goods are exempt.
However after 10.09.2004, CENVAT Credit Rules have been amended to provide for availment of CENVAT credit by 100% EOUs also and thereafter no refund claims can be rejected on this ground. In our opinion after 10.09.2004 CENVAT credit cannot be denied on the ground that unit availing the credit is a 100% EOU. Further we also take note of the fact that Circular No. 54/2004-Cus. dated 13.10.2004 also clarifies that credit can be taken by 100% EOUs.
6.5. Issue No.5: The activity of provision of service is in India and therefore the claim for refund on the ground that service has been exported cannot be accepted.
In some services especially business auxiliary service, some of the assessees in India rendered services to the principals abroad by undertaking sales promotion and marketing of their goods. The question arises whether it may be said that there is an export of service in such cases. No doubt remittance for consideration for the services rendered is received in foreign currency from the principal abroad. However, the stand has been taken by the Revenue that in such cases, the entire activity of sales, marketing promotions and after sales service/maintenance etc. takes place in India only and therefore it cannot be said that there is an export of service. It is also viewed that even the benefits of such activities also accrue only in India. However, it was submitted by the appellants that the Board itself has issued a clarification vide Circular No. 111/5/2009-ST dated 24.02.2009. In this circular in paraggrah-3 Board has accepted that for category (iii) services (As per Export of Services Rules), it is possible that export of service may take place even when all the relevant activities take place in India so long as benefits of these services accrue outside India. This is because service tax is a destination based tax. It is felt that many claims have been disallowed because benefit of this Circular was not available and we are quite sure that when the issue is reconsidered, wherever this circular is applicable, the same would be applied and therefore wherever refund claims involve this service and claim has been disallowed on this ground, they have to be remanded with a direction to follow the remand instructions and apply the instructions to the facts of the case.
6.6. Issue No. 6: Nexus between the input services and the output services.
We have already taken a view earlier in the order that several services have been considered and decisions rendered and those decisions also have been cited for the purpose of consideration of the services as input services vis-a-vis output service. There are several decisions in the refund claims which are subject matter of dispute before us herein. The lower authorities have taken a view that in view of the decision of the Honble Supreme Court in the case of Maruthi Suzuki Ltd reported in [2009 (240) ELT 641 (SC)], unless the input service has a direct nexus with the output services, refund is not admissible. However in the case of KPMG reported in 2014 (33)STR 96 Tri Delhi, after considering several decisions on this issue, the Tribunal had come to the conclusion which is in paragraph-8 and is reproduced below for better appreciation.
8. Input service is defined in Rule 2(l) of the Cenvat Credit Rules, 2004 as :-
Input services means any service -
(i) used by a provider of taxable service for providing an output service ; or
(ii) used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products from the place of removal, and included services used in relation to setting up, modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage up to the place of removal, procurement of inputs, activities relating to business such as accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, and security, inward transportation of inputs or capital goods and outward transportation up to the place of removal. On true and fair construction of Rule 2(l), insofar as is relevant to the facts on hand, it is clear that any service used by the provider of a taxable service for providing an output service including services used in relation to the setting up, modernisation, renovation or repairs of the premises of the provider of output service or for an office relating to such premises, procurement of inputs, activity relating to business such as inter alia inward transportation of inputs or capital goods and output transportation to the place of removal, would constitute input service. Input service is defined as applicable to either a manufacturer or any other provider of output service. Therefore, wherever, the issue involved is the one similar to the decision in the case of KPMG, the decision in the case of KPMG is required to be followed.
We also take note of the fact that in the case of Ultratech Cement, Honble High Court of Bombay had considered this issue in great detail. Honble High Court had also considered the decision in the case of Maruti Suzuki Ltd. Finally, the Honble High Court came to the conclusion that the input services should have been used in or in relation to the business of manufacture and the sum and substance of the conclusion is that there is no need for a direct relation between input service with the manufacture. Taking note of the fact that the definition of input service is an inclusive definition and therefore the services which are related to business of manufacture also have to be treated as input service, the Honble High Court made several observations and the most relevant observation is in paragraph 31 and is reproduced for better appreciation.
31.?In our opinion, the ratio laid down by the Apex Court in the case of Maruti Suzuki Ltd. (supra) in the context of the definition of input in Rule 2(k) of 2004 Rules would equally apply while interpreting the expression activities relating to business in Rule 2(l) of 2004 Rules. No doubt that the inclusive part of the definition of input is restricted to the inputs used in or in relation to the manufacture of final products, whereas the inclusive part of the definition of input service extends to services used prior to/during the course of/after the manufacture of the final products. The fact that the definition of input service is wider than the definition of input would make no difference in applying the ratio laid down in the case of Maruti Suzuki Ltd. (supra) while interpreting the scope of input service. Accordingly, in the light of the judgment of the Apex Court in the case of Maruti Suzuki Ltd. (supra), we hold that the services having nexus or integral connection with the manufacture of final products as well as the business of manufacture of final product would qualify to be input service under Rule 2(l) of 2004 Rules At this juncture learned A.R. submitted that the decision in the case of Telco Construction Equipment Ltd [2013 (32) STR 482 Tri-Bang] should be considered and he submits that in this decision, the Tribunal had taken a view that several services may not be considered as input services and he also submits that this decision considers almost all the precedent decisions on the issue. However, we take note of the fact that after the matter was referred to third Member, the Tribunal came to the conclusion that the matter should be remanded to enable the appellant to establish integral connection between the service and the business of manufacture of final product. It is nobodys case that there is no need to establish the relation between the input services and the business of manufacture. This is precisely the conclusion that has been arrived at by the Honble High Court of Bombay in the case of Ultratech referred to (supra).
6.7. Issue No.7: Foreign Inward Remittance Certificate.
In certain cases, the lower authorities have taken a view that production of foreign inward remittance certificate by the claimant to claim refund is not sufficient. A certificate from the bank certifying that the amount in the invoice has been received specifically with reference to the invoice has to be made available. After going through the Notification, no doubt the Notification provides that the claimant should submit copies of invoices and a certificate from the bank certifying realization of export proceeds. However, the question arises whether the bank should certify invoice wise. In many cases, both service provider and the service receiver maintain running ledger accounts and receiver of service keep making lump sum payments. In such cases payments made go on getting adjusted towards services rendered. That being the position, the bank will not be in a position to certify that the amount has been received in respect of a specific invoice. Therefore, in such cases it would be unrealistic to require claimants of refund to produce invoice-wise certificate from the bank. Even though several objections have been raised, the Board took note of this problem and in the Circular dated 12.03.2009, taking note of the problems that are arising in considering refund claims filed by various assessees, the Board had come out with clarifications in Circular No. 112/6/2009. In this circular as regards FIRC, Board had clarified that where FIRCs are issued on consolidated basis, exporter should submit self-certified statement along with FIRC showing details of exports to which FIRC pertains. Refund should be allowed on such certified statement. Further the exporter should maintain a register, which should be reconciled with remittances periodically. We are not able to agree with the submission of Authorized representatives that clause 3(b) of Notification No 5/2006 means that certificate issued by the bank should have a reference to invoice wherever possible and especially where the amounts are received in consignment-wise in respect of export. We do not consider that clause 3(b) can be interpreted in such a manner. In our opinion what is required to be established by an exporter is that in respect of invoices raised by him, consideration in foreign currency has been received. This is what is required to be established. It is definitely possible for the proper officer considering the refund claim to verify the documents produced and come to the conclusion whether foreign remittances in respect of exports made have been received or not. If there is difficulty, they can definitely seek clarification. If it is found that claimant is misleading the department, Investigations can be taken up. If there is misdeclaration or mala fide, proceedings can be initiated.
6.8. Issue No.8: Can clearance to a 100% EOU be considered as export?
After hearing both sides, we find that this issue is no longer res integra and is covered by the decision in the case of NBM Industries [2012(276)ELT 9 Gujarat] & Shilpa Copper Wire Industries [2011 (269)ELT 77 Gujarat.] Therefore, we consider that wherever this issue is involved, the authorities sanctioning the refund would follow these decisions.
6.9. Issue No.9: Proof of payment of service tax In some cases, the authorities sanctioning the refund are insisting that the claimant should produce proof of payment of service tax by the service provider. It was also mentioned during the course of hearing that in one of the cases, the Revenue was insisting that the invoices should have been issued in terms of Rule 4A of Service Tax Rules by the foreign service provider. We consider that these are not requirements which are required to be fulfilled in the notification and we are sure, the wiser counsel would prevail.
In some cases, the authorities have insisted that the invoice for the input service and output service should be on the same bunch. This is also not a requirement as per the Notification and therefore this also cannot be insisted upon.
6.10. Issue No. 10: Defective documents.
One of the objections raised while considering the refund claims is that the concerned input service receiver or the manufacturer had not been registered during the period when credit was taken. This issue is no longer res-integra since in the case of mPortal India Wirless Solutions P. Ltd. vs. C.S.T., Bangalore [2012 (27) S.T.R. 34 (Kar.)], Honble High Court of Karnataka has taken a view that registration with department is not a pre-requisite for claiming the Cenvat credit. At this juncture, it would be appropriate to refer to Rule 3 of Cenvat Credit Rules, 2004 which also provides that a manufacturer or producer of final products or a provider of service shall be allowed to take credit and nowhere the word registered is found. If the intention was not to allow the Cenvat credit when the unit or the service provider was not registered, Rule 3(1) of the Cenvat Credit Rules would have read as a registered manufacturer or registered service provider. Therefore, the rejection of the claim for refund of Cenvat credit is not admissible when the unit was not registered cannot be upheld.
6.11. Issue No.11: Condonation of omissions in documents as per the provisions of Rule 9 of Cenvat Credit Rules, 2004.
Rule 9(2) of Cenvat Credit Rules provides that if the document does not contain all the particulars but contains details of duty or service tax payable, description of goods, taxable service, assessable value, Central Excise or Service tax registration number of person issuing the invoice, as the case may be, name and address of the factory or warehouse or premises of first or second stage dealers or provider of taxable service, and the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise is satisfied that the goods or services covered by the document have been received and accounted for in the books of the account of the receiver, he may allow the Cenvat credit. We find that the assessees are also making mistake of not filing application seeking consideration of their claim by applying provisions of Rule 9(2) of the Cenvat Credit Rules 2004 and the departmental authorities also have refused to consider during the course of appeal. Wherever documents are defective but these requirements are the ones which are not mandatory as per the provisions of Rule 9 of CCR, 2004 or defects are held to be curable by precedent decisions cited before the original adjudicating authority, in our opinion, such claims have to be considered by applying provisions of Rule 9(2) instead of rejecting the claims outright. We also advise the assessees wherever such requests have not been made, they may make such requests and the authority can consider such requests and thereafter, process the refund claim.
As regards defects which are not covered by Rule 9(2), in the absence of any specific decision or a general ruling taking a view that all defects are curable, at this stage, it has to be considered on case to case basis and a view has to be taken. Therefore, we do not propose to render a decision on this issue treating it as a common issue.
6.12. Issue No.12: Rejection of refund claim on the ground that output service is not taxable.
Learned A.R. on behalf of the Revenue submitted that refund is not admissible when output service is exempted and not taxable. However, several decisions were cited by learned counsels on behalf of the assessees wherein a view has been taken that even though the software is not taxable service, service tax paid on input services is refundable. In the case of mPortal India Wireless Solutions P. Ltd. (supra) such a view was taken. The relevant paragraph is reproduced below for better appreciation.
6.?The assessee is a 100% export oriented unit. The export of software at the relevant point of time was not a taxable service. However, the assessee had paid input tax on various services. According to the assessee a sum of Rs. 4,36,985/- is accumulated Cenvat credit. The Tribunal has categorically held that even though the export of software is not a taxable service but still the assessee cannot be denied the Cenvat credit. The assessee is entitled to the refund of Cenvat credit. Similarly insofar as refund of Cenvat credit is concerned, the limitation under Section 11B does not apply for refund an accumulated Cenvat credit. Therefore, bar of limitation cannot be a ground to refuse Cenvat credit to the assessee. Learned A.R. on behalf of the Revenue submitted that this decision was given in the case of 100% E.O.U. and therefore applying the same to other units which are not 100% E.O.U. was not correct. Honble High Court of Bombay in the case of Repro India Ltd. vs. Union of India [2009 (235) E.L.T. 614 (Bom.)] has taken a view that even if finished goods are exempted, the refund of Cenvat credit would be admissible. In that case, the issue under consideration was where the goods are not exported under Bond or Letter of Undertaking which is a requirement under Rule 19 of the Central Excise Rules 2002, credit can be allowed or not. Honble High Court took a view that even if export is not made under Bond or Letter of Undertaking, refund is admissible. Subsequently, amendment was carried out but during the period prior to such amendment, the decision would be applicable in any of the cases before us if export has taken place prior to amendment. Therefore, decisions in cases where credit has been denied or refund has been denied on the ground that export is not made under Bond or Letter of Undertaking cannot be sustained.
6.13. Issue No.13: Cenvat credit without registration.
We take note of the fact that even in the case of rejection of refund on the ground that appellant is not registered with the Service Tax department, Honble High Court took a view that even if unit is not registered, credit would be admissible. Provisions of Rule 3 of Cenvat Credit Rules, 2004 show that credit can be taken by a manufacturer or a provider of output service and there is no requirement of registration under Rule 3 of the CCR, 2004 at all.
6.14. Issue no. 14: Taxability of output and admissibility of Cenvat credit Further when we consider Rule 5 of Cenvat Credit Rules, without consideration of any case law or any decision, it appears that there may not be any such restriction that output service or goods should be taxable. In fact, Rule 5 uses the clause where any input or input service is used in the manufacture of final product which is cleared for export under bond or letter of undertaking, as the case may be, or used in the intermediate product cleared for export, or used for providing output service which is exported. In the case of manufacture of goods, there is a requirement that they should be exported under bond or Letter of undertaking and there is no requirement that they should be taxable. In the case of output service, there is neither such requirement that it should be taxable nor requirement of export under bond. The requirement is that service should have been used in providing output service (for providing output service after amendment) and such credit shall be either utilized or claimed as refund. That being the case, rejection of refund claimed on the ground that output service is not taxable or exempted cannot be sustained. The Tribunal in the case of KPIT Cummins Infosystems Ltd. vs. C.C.E. [2013 (32) S.T.R. 356 (Tri.) held that that Cenvat credit for export of exempted service would be available as refund. The Tribunal relied upon Repro India Lt. vs. Union of India (supra) referred to by us above while coming to this conclusion. In the case of mPortal India Wireless Solutions (supra) also the same view was taken by Honble High Court of Karnataka. In view of these decisions, the admissibility of Cenvat credit is not relevant for the purpose of determination whether refund is admissible under Rule 5 of CCR or not.
6.15. Issue No. 15: Relevant date for filing refund claim.
As regards limitation, according to Notification No. 5/2006-C.E. (NT) dated 14.3.2006, the provisions of Section 11B of Central Excise Act would be applicable for the purpose of considering whether claim is within the period prescribed for claiming refund. Several questions arise. The first question is whether Section 11B would be applicable at all. In view of the fact that Notification which is meant to provide for safeguards, conditions and limitation, provides such limitation, it cannot be said that Section 11B cannot be applied. It was argued that by incorporating the provisions for application of Section 11B of the Act for the purpose of limitation in the notification, the executive has exceeded the power given to them for issue of notification. It was argued that Section 11B of the Act cannot be quoted in the notification for the purpose of limitation at all. Therefore, provision relating to limitation cannot be applied. The answer is that if a provision or a clause in the notification is in excess of powers granted for issue of notification or amending a rule or for any other purpose, the remedy is under Article 226 of the Constitution or Article 32 of the Constitution and therefore, the Tribunal can only see whether notification or rule or act and whether those provisions have been followed or not and cannot go into correctness or virus of a provision of a rule or notification. Therefore, we have to apply the notification and only if there is ambiguity, we may have to resort to interpretation but not when the notification is clear. There is no dispute on meaning of words used in this clause and it would be inappropriate to take the view advanced before us that this provision should be ignored or not applied. Moreover, as submitted by learned A.R., notifications are to be placed before the Parliament and they have to be approved. That being the position, it cannot be said that the legislature is not aware of such notification and therefore, it is also to be held that notification has also been approved by Parliament. we also take note of the fact that Honble Supreme Court has taken a view that notification is part of statute and therefore we cannot say that it is beyond the power to incorporate a provision like this in the notification. Moreover, if the notification was to reproduce the provisions of section 11B of Central Excise Act without referring to the section, this objection could not have been raised at all.
Another argument advanced was that Section 11B would not be applicable for Cenvat credit taken on input service at all. Our attention was drawn to the provisions relating the relevant date under Section 11B(5), Explanation (B). According to this Explanation, relevant date means (a) in the case of goods exported out of India where a refund of excise duty paid is available in respect of the goods themselves or, as the case may be, the excisable materials used in the manufacture of such goods , the relevant date would be the date of export. It was submitted that no doubt provisions of Section 11B have been made applicable to service tax matters too. It was submitted that provisions relating to relevant date under Section 11B cited in the notification deals with input service for manufacture of excisable goods and therefore, it may not be correct to substitute this with service for the purpose of refund under Rule 5. Therefore, it was submitted that limitation under Section 11B was not applicable at all and therefore, there is no limitation for making claim for refund.
It was submitted that in this case, refund being claimed is Cenvat credit and not the duty or tax paid. In fact if we go through the provisions of Rule 5, it provides that Cenvat credit in respect of inputs or inputs service can be utilized for payment of duty or service tax on final product or output service and where such adjustment is not possible, the manufacturer or the output service provider will be allowed refund. Further, we find that Section 83 of the Finance Act, 1994 makes provisions of Section 11B applicable for the purpose of service tax matters also. When Section 11B is applicable to service tax matters, we have to replace words excisable goods used under Section 11B as services. Therefore, for the purpose of refund, in view of the specific provisions of Section 83 and notification under Rule 5, it is necessary to substitute service in place of goods. We are not able to agree with the submission that this cannot be done. Therefore, provisions of Section 11B for the purpose of limitation would be applicable.
Moreover, it is settled law that while interpreting notification or statute, it is necessary to interpret in such a manner that the relevant clause or the provision does not become OTIOSE. If the submission made be learned counsel on behalf of the appellants that Section 11B would not be applicable at all, we would be rendering the clause relating to Section 11B in the notification totally irrelevant for the purpose of refund. In view of this reason, this submission cannot be accepted.
6.16. Issue No.16: Method for calculation of relevant date Next question arises is how to apply Section 11B for calculating limitation. The Honble High Court C.C.E. vs. GTN Engineering (I) Ltd. [2012 (28) S.T.R. 426 (Mad.)], has taken a view that in such cases, the date of export of goods would be relevant date for arriving at the relevant date.
Learned counsel on behalf of the appellants relied upon 3 decisions of various High Courts wherein a view was taken that there is no limitation for the purpose of refund of accumulated credit under Rule 5 of the Cenvat Credit Rules, 2004. One of the decisions was rendered by Honble High Court of Jharkhand in the case of Commissioner of Central Excise, Jamshedpur vs. Tata Motors Ltd. [2013 (296) E.L.T. 7 (Jar.)]. In our view, this decision should not be taken into account in view of the facts that in that case, there was an order of disallowance of credit which had not become final and therefore, refund claim could not have been filed by the assessee at all. Paragraph 8 of the said decision is relevant and reproduced below:
8.?We are of the considered opinion that in fact the issue sought to be raised by the appellant-Revenue is already answered by Honble Supreme Court in the case of Samtel India Ltd. v. CCE reported in 2003 (155 14 (S.C.) and, therefore, in this appeal no question of law arises including with respect to the other two issues. The objection of the Revenue that in this very proceeding refund could not have been ordered or the claim of the assessee became barred by time, we are of the considered opinion that when the order with respect to disallowance itself had not become the final, before that the claim of refund could not have been raised by the assessee. Therefore, during the pendency of his claim for Modvat allowance itself was under consideration wherein the authority had jurisdiction to pass appropriate order with respect to the entitlement of Modvat benefit to the assessee, then in that situation, the assessee could not have moved any application for refund of the said amount which would have been in air. In this situation also, the question of bar of limitation in fact cannot apply and, therefore, there arises no question of law in this appeal. The second decision cited by learned counsel was rendered by Honble High Court of Madhya Pradesh in the case of STI India Ltd. Vs. Commissioner of Customs & C. Excise, Indore [2009 (236) E.L.T. 248 (MP)]. In that case, the relevant provisions (Rule 57F) and the relevant clause 6 of Appendix to Notification issued under Rule 57F was not discussed and considered in detail. The Honble High Court took note of the fact that the claim was under clause 6 of appendix to notification and thereafter, the observations made by the High Court in Para 7 which are reproduced below :
7.?In our opinion, merely because the refund application was not filed strictly within 6 months before expiry of period specified in Clause 6 of Appendix read with Section 11B ibid but was filed late by 27 days could not have been made the sole ground for the rejection of application as barred by limitation. In fact, the claim in question did not fall strictly within the four corners of Section 11B but it essentially fell within the four corners of Clause 6 of Appendix to notification issued under Rule 57F. In the decision rendered in the case of GTN Engineering (I) Ltd. [2012 (28) S.T.R. 426 (Mad)], Honble Madras High Court considered this issue in great detail and provisions were cited and considered. Being a judgment which was delivered later and considered all the relevant statutory provisions, in our opinion, it would be appropriate to follow the decision of the Honble High Court of Madras than Honble High Court of Jharkhand cited supra.
Another decision cited by learned counsel on behalf of the assesses is the decision rendered by Honble High Court of Gujarat in the case of Commissioner of C. Ex. & C., Surat-I vs. Swagat Synthetics [2008 (232) E.L.T. 413 (Guj.)]. This decision was considered by Honble High Court of Madras in the case of Commissioner of C. Ex., Coimbatore vs. GTN Engineering (I) Ltd. (supra). In Swagat Synthetics case (supra), Honble High Court of Gujarat took note of the decision in Paragraph 16 and observed that Rule 57F (13) of the Central Excise Rules, 1944 does not prescribe any time limitation. In the absence of such limitation, Honble High Court of Gujarat also held that claim cannot be rejected on the ground of limitation. On this ground, Honble High Court of Madras distinguished the decision of Honble High Court of Gujarat. In the case of Swagat Synthetics (supra), Honble High Court of Gujarat has taken note of provisions for refund under Rule 57F of the Rules and Notification No. 29/96-C.E. (N.T.) dated 3.9.1996 and in both the rules and the notification, there is no time limit and on this ground, Honble High Court of Gujarat held that there would be no limitation and therefore, refund is admissible. Therefore, the decision of Honble High Court of Gujarat cannot be applied to the facts of the cases before us.
We find that Honble High Court of Madras had considered the same issue in C.C.E. vs. GTN Engineering (I) Ltd. case (supra). In that case, Honble High Court considered the provisions of Section 11B of Central Excise Act, 1944, Rule 5 of Cenvat Credit Rules, 2004 and Notification (No. 5/2006-C.E. (N.T.) issued and thereafter, in paragraph 14, came to the conclusion that limitation would be applicable. In the subsequent paragraph, Honble High Court also decided on what basis the limitation could be calculated. Paragraphs 14 & 15 are relevant and are reproduced below :
14.?The said notification prescribes a period of one year, as provided under section 11B of the Central Excise Act, for the purpose of making application in Form-A along with prescribed enclosures and also the relevant extracts of the records maintained under the Central Excise Rules, 2002, Cenvat Credit Rules, 2004 or Service Tax Rules, 1994 in original. That application should be filed before the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be. For the purpose of finding out as to the relevant date for the purpose of making claim for refund of CENVAT credit, Rule 5 should be made applicable. It is the contention of the learned counsel for the assessee that the provision defining relevant date does not cover the claim for refund of CENVAT credit. We may point out that when a statute empowered for such claim, the said provision must be read to find out as to the relevant date. Rule 5 specifies that where any input or input service is used in the manufactures of final product which is cleared for export under bond or letter of undertaking as the case may be, or used in the intermediate product cleared for export, or used in providing output service which is exported, the CENVAT credit in respect of the input or input service so used shall be allowed.
15.?A reading of the above rule, though there is no specific relevant date is prescribed in the notification, the relevant date must be the date on which the final products are cleared for export. If any other conclusion is arrived, it will result in disentitling any person to make a claim of refund of CENVAT credit. Admittedly, the respondent has made a claim only invoking Rule 5 of the CENVAT Credit Rules, 2004. In that view of the matter, there cannot be any difficulty for us to hold that the relevant date should be the date on which the export of the goods was made and for such goods, refund of CENVAT credit is claimed. Learned A.R. on behalf of the Revenue relied upon the decision rendered by Honble High Court of Andhra Pradesh in the case of S.K. Mahaboob Ali vs. Director General Police, C.R.P.F., New Delhi [2005 (192) E.L.T. 143 (A.P.) and submitted that when there are decisions taking different views by co-ordinate Benches of Honble Supreme Court, the later is better. On this ground also, the decision of Honble High Court of Madras rendered in the case of C.C.E. vs. GTN Engineering (I) Ltd. (supra) can be applied to the facts of these cases. This was opposed by learned counsels appearing for appellants on the ground that decision considered the issue of the decisions of different co-ordinate Benches of Supreme Court and in this case, the decisions have been rendered by different High Courts. There are four High Courts decisions and if all of them are applicable, in our opinion, the principles of ratio laid down in the case of S.K. Mahaboob Ali vs. Director General Police, C.R.P.F., New Delhi [2005 (192) E.L.T. 143 (A.P.) rendered by Honble High Court of Andhra Pradesh are applicable and relevant.
7. At this stage, it is inappropriate to leave out a decision which was mentioned by one of the counsels appearing for the appellants and this decision is rendered by Honble High Court of Karnataka in the case of Union of India vs. Slovak India Trading Co. Pvt. Ltd. [2006 (201) E.L.T. 559 (Kar.)]. In this case, refund claim was preferred on the ground that the assessee had stopped production due to closure of their factory and had come out of Modvat Scheme. We consider that the decision rendered in that case involved totally different set of facts and therefore, it cannot be applied to the facts of the present cases.
8. After considering the decision of Honble High Court of Madras in the case of C.C.E. vs. GTN Engineering (I) Ltd. [2012 (28) S.T.R. 426 (Mad.)], this Tribunal had taken a view that for the purpose of calculating limitation in respect of claim for refund of tax paid on input service, the relevant date should be the date on which the consideration has been received where the claimant is service provider and consideration paid where the claimant is service receiver. This decision was rendered in the case of Hyundai Motor India Engineering (P) Ltd. vs. C.C.E., Hyderabd [2014-TIOL-1034-CESTAT-BANG]. Therefore in our opinion, this decision can be followed.
9. At this stage, another issue raised was what happened when advance amount was received. If advance is paid and service cannot be rendered/partly rendered, the consideration may be reworked out. Moreover, the refund would be admissible only when output service has been rendered and refund is admissible. We consider that where advance was received, it would be appropriate to take the date of final invoice. It was also submitted by learned counsel on behalf of the appellants that Rule 3 of Export of Rules supports this view.
( Operative portion of this order was pronounced in the court on conclusion of the hearing) S.K. MOHANTY JUDICIAL MEMBER B.S.V.MURTHY TECHNICAL MEMBER VC/PNR/ISS/NR 3