Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise, ... vs Aam Services India Pvt. Ltd on 27 October, 2015
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT No. I APPEAL No. ST/85128/15-Mum ST/CO/91016/15-Mum (Arising out of Order-in-Appeal No. PUN-EXCUS-003-APP-063-14-15 dated 02/09/2014 passed by Commissioner of Central Excise (Appeals), Pune-III) For approval and signature: Honble Mr. M.V. Ravindran, 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. AAM Services India Pvt. Ltd. Respondent Appearance: Shri A.B. Kulgod, Assistant Commissioner (AR), for Appellant Shri Amit Agarwal, Consultant for Respondent CORAM: Honble Mr. M.V. Ravindran, Member (Judicial) Date of Hearing : 27/10/2015 Date of Decision : -------------- ORDER NO Per: M.V. Ravindran
This appeal is filed by the Revenue against Order-in-Appeal No. PUN-EXCUS-003-APP-063-14-15 dated 02/09/2014 and cross objection is filed by the respondent assessee.
2. The relevant facts that arises for consideration the assessee respondent had filed an application for refund of the amount of Cenvat Credit lying unutilized during the July to September, 2012 under rule 5 of Cenvat Credit rules 2004 (CCR) read with notification no. 27/2012-CE (NT). The adjudicating authority rejected the refund claim of Rs. 27,85,000/- while sanctioning an amount of Rs. 50,33,083/-. Aggrieved by such an order an appeal was preferred before the first appellate authority. The first appellate authority allowed the appeal of the assessee and sanctioned the refund claim to further extent of Rs. 29,79,038/-. Revenue is aggrieved by such an order and they are before the tribunal. At the outset, the cross objection which is filed being in support of order-in-appeal, is disposed of.
3. Learned departmental representative after taking me through the order-in-appeal submits that the first appellate authority has in correctly understood the export turnover of services. It is his submission that for arriving at refund amount, there should be receipt an amount under notification no. 27/2012, filling of refund claim should be with copies of FIRCS/bank certificate, hence conclusion reached by the first appellate authority in respect of receipt of payment is wrong and is not covered under provisions Section 11B of Central Excise Act, 1944. It is also his submission that filing of the refund claim under rule 5 also to needs to read with limitation as prescribed under provisions of section 11B of the Central Excise Act, 1944; would mean that in this case assessee has filed two refund claim beyond one year and the findings that there is curtailment of period as has been recorded by the first appellate authority is erroneous. It is his further submission that the claim in this appeal having been filed beyond time limit under section 11B of the Central Excise Act 1944, refund claim is correctly denied.
4. Learned consultant appearing on behalf of the respondent assessee would draw my attention by the same findings, submit that appellant has filed a refund claim within the period that is after the end of the quarter. It is his submission that provisions of rules 6A of the Central Excise rules, is fulfilled and FIRCS as required are submitted. He took me through two rules, rule 5 and rule 6A. He would submit that the judgment of the tribunal in the case of Bechtel India Pvt. Ltd. 2014 (34) S.T.R. 437, records about non applicability of section 11B of the Central Excise Act 1944. He produces a statement along with copy of details of export made, FIRCS and indicates that these have been considered by the first appellate authority while passing the impugned order.
5. I have considered the submissions made at length by both sides and perused the records. The issue in brief is the appellant herein is exporter of services Consulting Engineering Services to their customers situated outside India during the relevant period in question. It is undisputed that the appellant had exported entire services and in order to render said services taken the credit of service tax paid on input services like maintenance or management services; business auxiliary services; renting of moveable property services; bank and financial services; management consultant services; there is no dispute as to the facts respondent assessee is provider of these services any for export, the services, he is also eligible for refund of the Cenvat Credit which remains unutilized.
6. The first appellate authority in the impugned order has held that the claim of refund of the respondent assessee needs to allowed. I find that the first appellate authority has considered the entire issue in its correct perspective while allowing the appeal filed before him. I reproduce the relevant findings.
14. As per the definition of Export turnover of services, as contained in clause (D) of new Rule 5(1) of the CCR, for calculating export turnover of services, only following components are to be included in Export turnover of services.
(a) the payments received during the relevant quarter for the services exported during the relevant quarter;
(b) the payments received during the relevant quarter for the services already exported; and ) export services whose provision has been completed during the relevant quarter and for which advance payment was received.
This definition specifically excludes those services whose advance payment is received during the relevant quarter, but which are yet to be provided completely. By virtue of the provision in the new Rule 5 that the amended provisions shall apply to exports made on or after the 1st April, 2012, the export of services made before 01-04-2012 but payments received after introduction of new Rule 5 of the CCR. Secondly, by virtue of the first proviso to sub-Rule (2) of new Rule 5 of the CCR, refund under the old Rule 5 could be claimed upto one year of commencement of the new Rule 5, i.e. upto 31-03-2013. The services exported upto 31.03.2012 are governed by old Rule 5 of the CCR and hence refund of CENVAT Credit in respect of the same should have been, and would have been, granted put 31-03-2013. This is because the services exported before 01-04-2012, but for which payments were received after 01-04-2012, are specifically excluded from the purview of new Rule 5 as per sub-rule (2). Further such services where required to be considered for Export Turnover of the given period when such services were provided in terms of erstwhile Notification No. 5/2006-CE(N.T.) and erstwhile Rule 5 of the CCR in as much as this Notification defines the export turnover as sum total of value of output services exported during the given period. Similarly, advance payments received before 01-04-2012 but services exported after 01-04-2012 shall be considered while filing a claim governed by the substituted (new) Rule 5 of the CCR. In case of advance payments received before 01-04-2012 but services exported after 01-04-2012, the said services are specifically included in the Export Turnover of services, as explained above, as per the new Rule 5. Further, the said services/payments were not to be considered for Export Turnover under the erstwhile Notification 05/2006-CE (N.T.) and the erstwhile Rule 5 of the CCR. Thus, I find that there is synergy between the provisions of earlier Notification 05/2006-CE(N.T.) and the new Notification No. 272012-CE(N.T.).
15. Applying the provisions described in Para 14 above on the present case, and on going through the reconciliation statement giving correlation of FIRCs of the relevant quarter July to September 2012 with the corresponding invoices, I find that the appellant have included the following invoices for calculating export turnover of services as below:
(a) Against which the payments received during the relevant quarter for the services exported during the relevant quarter = NIL
(b) Against which the payments totaling Rs.4,86,32,973/- were received during the relevant quarter for the services already exported, as given below:
S.No. FIRC Date FIRC No. Date of Receipt of FIRC FRIC Amount (Rs.) Remarks 1 17.8.12 114892 17.8.12 7880873 Part receipt for April, 12 2 29.8.12 115230 29.8.12 8214000 Part receipt for April, 12 3 11.9.12 115644 11.9.12 5461000 Part receipt for April, 12 4 18.9.12 115911 18.9.12 16050000 Part receipt for April & May, 12 5 27.9.12 116309 27.9.12 11027100 Part receipt for May, 12 As explained in para 14 above, the said payments totaling Rs. 4,86,32,973/- are required to be included in the Export Turnover of services as per clause (D) of Rule 5(l) of the CCR. Thus, I find that the Export Turnover of services is Rs. 4,86,32,973/- (Rs. NIL+ Rs. 4,86,32,973/-). The Appellant have calculated the Export Turnover of services at Rs.9,57,65,100/- which is found incorrect.
16. I also find that the Appellant have also included the following invoices for calculating Export Turnover of services as below:
Against services exported before 01-04-2012, but payments received during July to September 2012:
S.No. FIRC Date FIRC No. Date of Receipt of FIRC FRIC Amount (Rs.) Remarks 1 9.7.12 113510 9.7.12 16581000 Part receipt of Feb, 12 & Mar, 12 2
17.7.12 113765 17.7.12 10850000 Part receipt for Mar, 12 3 24.7.12 114008 24.7.12 11070000 Part receipt for Mar, 12 4 17.8.12 114892 17.8.12 8631127 Part receipt for Mar, 12 However, the above payments totaling 4,71,32,127/- are not eligible for inclusion in the Export Turnover off services as per clause (D) of Rule 5(1) of the CCR.
17. Further, it is also clear from the figures mentioned in the Order-In-Original that the appellant had exported their entire turnover and had not provided any other services, including in the domestic Tariff Area, during 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. In view of the above discussions, I find that the admissible refund amount needs to be re-calculated. The same is done as under:
Export turnover of services = Rs.4,86,32,973/-
Total Turnover = Rs. 4,86,32,973/-
Net CENVAT Credit = Rs.45,12,121/-(48,18,805/-Minus 3,06,684/-) Refund amount = Export turnover of services X Net Cenvat credit Total turnover Refund = 48632973/-X 4512121/- = 4512121/-
amount 48632973/-
Since refund of Rs. 15,33,083/- has already been granted vide the impugned Order-in-Original, the appellant are found entitled to further refund of Rs.29,79,038/- (Rs.45,12,121/- minus Rs. 15,33,083/- = Rs.29,79,038/-). It can be seen from the above reproduced findings that first appellate authority has correctly followed the law which grants the refund of unutilized Cenvat Credit that has been taken in respect of the services which were used for export of services. When there is no dispute of service tax payment on input services, utilization thereof for export of services. To my mind findings recorded by the first appellate authority are correct and does not require any interference.
7. As regards the application of time limit, of section 11B to the entire issue, I find that the question of application of section 11B would not arise, as in the case in hand the refund of amount of Cenvat Credit availed on various input services is clearly covered by rule 5 of CCR, which lays down the time limit for filing of the refund claim i.e. within one year from the end of quarter during which services were exported, the finding recorded by the first appellate authority on this point is correct and does not require any in curtains.
8. In view of the forgoing, I find that the impugned order is correct and legal and does not require any interference. The cross objection filed by the respondent stands disposed of.
(Operative part pronounced on ----------------) (M.V. Ravindran) Member (Judicial) akp 1 8 APPEAL No. ST/85128/15-Mum ST/CO/91016/15-Mum