Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise, ... vs M/S. Apotex Research Private Ltd on 18 January, 2017
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: E/25504/2013-SM [Arising out of Order-in-Appeal No. 380-381/2012 dated 20/11/2012 passed by Commissioner of Central Excise (Appeal), BANGALORE-I.] Commissioner of Central Excise, Customs and Service Tax BANGALORE-I POST BOX NO 5400, CR BUILDINGS, BANGALORE - 560001 Appellant(s) Versus M/s. Apotex Research Private Ltd. No.1, Bommasandra Industrial Area, 4th Phase, Jigani Link Road BANGALORE - 560001 KARNATAKA Respondent(s)
Appearance:
Dr. Ezhilmathi, AR For the appellant Shri S. Sivakumar, Advocate For the respondent Date of Hearing: 18/01/2017 Date of Decision: 18/01/2017 CORAM:
HON'BLE SHRI S.S GARG, JUDICIAL MEMBER Final Order No. 20119 / 2017 Per : S.S GARG The present appeal has been filed by the Revenue against the impugned order dated 20.11.2012 passed by the Commissioner (A) whereby the Commissioner (A) has set aside the Order-in-Original whereby the original authority rejected the refund claim amounting to Rs.5,66,916/- being time barred.
2. Briefly the facts of the case are that the respondent-assessee is a 100% EOU engaged in the manufacture and export of organic compound. The assessee had filed three refund claims under Rule 5 of CENVAT Credit Rules (CCR), 2004 read with Notification No.5/2006-CE dated 14.3.2006 on a plea that the amount of CENVAT credit claimed as refund is attributable to the input/input services used in the manufacture and export of final products or used in providing output services. Out of the three refund claims, one claim was found to be time barred and the details of which are given below:
Amount of refund claimed initially (Rs.) Period to which the claim relates Date of filing the refund claim No. & date of OIO rejecting the refund claim as time barred Amount under dispute rejected on the ground of time bar Rs.16,36,883/-04/2007 to 06/2007
30.5.2008 189/2011 (R) dt.23.6.2011 Rs.5,66,916/-
2.1 The adjudicating authority on scrutiny of the refund application observed that the claim was required to be filed within one year from the date of which the export goods left India and as the claim was filed after the expiry of the stipulated period, the refund was partially rejected as hit by time bar. Aggrieved by the said order, the assessee filed appeal before the appellate authority on the ground that the provisions of Section 11B are not applicable to claim refund of CENVAT credit already taken. The appellate authority vide the impugned order had disposed of the partys appeal holding that the refund claim of Rs.5,66,196/- is not hit by limitation of time in terms of judgment of Honble High Court of Karnataka in the case of mPortable India Wireless Solutions Pvt. Ltd. vs. CST, Bangalore reported in 2011-TIOL-928-HC-KAR-ST. The appellate authority vide the impugned order dated 20.11.2012 set aside the order passed by the Assistant Commissioner with a direction to the original authority to reconsider the refund claim of the assessee and to pass an order on merits by relying upon the decision in the case of mPortal India Wireless Solutions Pvt. Ltd. cited supra. Aggrieved by the said order, Revenue is in appeal.
3. Heard learned AR and the counsel for the assessee.
4. The learned AR submitted that the impugned order is not sustainable in law because in the present case, it is not the export of goods which is involved rather it is the case where there is an export of service. She further submitted that the relevant date should be the end of the quarter in which the consideration for services exported is realized. She also submitted that in terms of Section 83 of Finance Act, 1994, the provisions of Section 11B is made applicable to the Service Tax provisions insofar as it relates to the Service Tax. Since the tax on services would be leviable to pay only on receipt of consideration as per Rule 6 of Service Tax Rules, 1994, the relevant date for determining export should be reckoned from the date of realization of export proceeds. She also submitted that in terms of provisions of Export of Service Rules, 2005, the services could be termed as export only upon the receipt of consideration in convertible foreign exchange. She also submitted that various Courts have consistently held that the relevant date for determining the limitation for refund of export of service is the date of realization of export proceeds. In support of her submission, she relied upon the following authorities:
i. CCE vs. Hyundai Motor India Engineering Pvt. Ltd.: 2015 (39) STR 984 (AP) ii. Hyundai Motor India Engineering Pvt. Ltd. vs. CCE: 2015 (39) STR 1019 (Tri.-Bang.) iii. CCE, Pune vs. Eaton Industries P. Ltd.: 2011 (22) STR 223 (Tri.-Mumbai) iv. M/s. Indago vs. CCE: 2016-TIOL-1020-CESTAT-MUM.
v. Bechtel India Pvt. Ltd. vs. CCE: 2014 (34) STR 437 (Tri.-Del.) vi. CST, Goa vs. Ratio Pharma India Pvt. Ltd.: 2015 (39) STR 31 (Tri.-LB)
5. On the other hand, the learned counsel appearing for the respondent-assessee cited various decisions in support of his submission and defended the impugned order passed by the learned Commissioner (A) while allowing refund under Rule 5.
6. After considering the submissions of both the parties, I find that as per Rule 6 of Service Tax Rules, 1994, it is provided that the service tax shall be paid to the credit of the Central Government (i) by 6th day of the month, if the duty is deposited electronically through internet banking; and (ii) by the 5th day of the month, in any other case, immediately following the calendar month in which the payments are received towards the value of taxable services. Further, I find that the decision of High Court in CCE vs. GTN Engineering Ltd.: 2012 (281) ELT 185 is not applicable in the present case as the said decision relates to export of goods and the present case is that of export of services. These claims have been filed under Rule 5 of CCR which reads as under:
Rule 5.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 utilized 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.
Condition, safeguards and limitation have been prescribed under Notification 5/2006 dated 14.3.2006 relevant extract of which are reproduced below:-
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 (N.T.), dated 1st March, 2002, published in the Gazette of India Extraordinary, vide number G.S.R. 150