Custom, Excise & Service Tax Tribunal
Shri. Mihir Deshmukh, Advocate For The vs Shri. Syamlal Karoliya, Asstt. ... on 28 April, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. II APPEAL NO. ST/85446, 85447/15, ST/85612 & 86211/15 Application No. ST/STAY/93939/15 IN APPEAL NO ST/86211/15 [Arising out of Orders-in- Appeal No. PUN-EXCUS-003-APP-101-14-15 & PUN-EXCUS-003-APP-102-14-15 dated 11/11/2014 & No. PUN-SVTAX-000-APP-0021-14-16 dated 9/2/2015 passed by the Commissioner of Service Tax(Appeals), Pune ] 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?
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Oceans Connect India Pvt Ltd
:
Assessee
VS
CCE Pune-III
:
Revenue
Appearance
Shri. Mihir Deshmukh, Advocate for the Appellants
Shri. Syamlal Karoliya, Asstt. Commissioner(A.R.) for the Respondent
CORAM:
Honble Mr. Ramesh Nair, Member (Judicial)
Date of hearing: 28/4/2016
Date of decision /2016
ORDER NO.
Per : Ramesh Nair
These four appeals are directed against Orders-in- Appeal No. PUN-EXCUS-003-APP-101-14-15 & PUN-EXCUS-003-APP-102-14-15 dated 11/11/2014 & No. PUN-SVTAX-000-APP-0021-14-16 dated 9/2/2015 passed by the Commissioner of Service Tax(Appeals), Pune. Stay application in Appeal No. ST/ 86211/15 is also filed by the Revenue.
2. The fact of the case is that assessee had filed refund claim for Rs. 8,08,569/- on 28/6/2013 for the period April-June 2012, for Rs. 9,77,895/- on 30/9/2013 for the period July- September, 2012 and for Rs. 6,12,128/- on 31/12/2013 for the period October-December, 31/12/2013 under Rule 5 of CCR, 2004 read with Notification No. 27/12-CE(N.T.) dated 18/6/2012 in respect of service tax paid on various input service used for providing output service which were exported. The adjudicating authority rejected all the claims on the ground that latest FIRC is dated 17/4/2012 whereas refund claim was filed on 28/6/2013. Since the date of realization of foreign convertible currency is considered as date of export therefore from the date of FIRC refund should have been filed within one year as provided under Section 11B therefore refund was filed belately beyond one year from the date of FIRC. It was also contended that out of Rs. 8,08,569/- credit of Rs. 2,29,489/- is not admissible as input service. As regard the refund claim of Rs. 9,77,895/- the Ld. Adjudicating authority taking the same ground rejected the refund claim. Aggrieved by the order of the Adjudicating authority, assessee filed appeal before the Commissioner(Appeals), who also rejected the refund claim of Rs. 8,08,569/- on the ground that the export turnover for the period April to June 2012 should be taken as per the date of invoice accordingly the exports claimed by the assessee does not fall under the period April-June 2012. It was also upheld by the Ld. Commissioner that Cenvat credit of Rs. 2,29,489/- in respect of Event Management Services, Rent-a-Cab Scheme Operators Services, Insurance Auxiliary Services are not admissible input services and Cenvat credit on Telecommunication/Internet Telecommunication Service and Chartered Accountants Service were availed in excess. In case of refund of Rs. 9,77,895/- Ld. Commissioner allowed the refund of Rs. 8,60,629/- however refund of Rs. 1,17,266 rejected on the ground that the same is related to Cenvat credit availed on Rent-a-Cab Service which was excluded from the definition of input service. Being aggrieved by order-in-original assessee filed two appeals bearing No. ST/85446 & 85447/15. Department also filed two appeals, first appeal bearing No. ST/86211/15 against Order-in-Appeal dated 9/2/2015 where under refund of Rs. 5,59,412/- was also rejected vide Order-in-Original dated 31/7/2014 and second appeal bearing No. ST/85612/15 against Order-in-Appeal No. 11/11/2014 whereunder out of the refund claim filed for Rs. 9,77,895/-, which was rejected, the first appellate authority has allowed the refund of Rs. 8,60,629/- .
3. Shri. Mihir Deshmukh, Ld. Counsel for the assessee submits that as regard the appeal No. ST/85447/15, it is related to the refund of Rs. 1,17,266/-which is against the Cenvat credit availed on Rent-a-Cab services. Since the said service stands excluded from the scope of input service, Ld Counsel concedes and does not press the said appeal.
3.1 As regard the Appeal No. ST/85446/15, he submits that the Ld. Commissioner(Appeals) rejected the refund on the ground that in the formula provided for calculation of refund amount as per Rule 5, the term export turnover should be taken as per the date of invoice. He submits that incase of export service the export is considered on the date of receipt of convertible foreign exchange that is date of FIRC. He submits that in the entire refund of Rs. 8,08,569/-, the date of FIRCs are during the period April June, 2012 therefore amount of export as per the FIRC should be taken as exports turnover, therefore refund should not have been rejected in this case.
3.2 As regard the Ld. Commissioner(Appeals) upheld that the rejection of Cenvat credit on the ground that same was availed on inadmissible input service i.e. Event Management Services, Rent-a-Cab Scheme Operators Services, Insurance Auxiliary Services, Telecommunication/ Internet Telecommunication Service and Chartered Accountants Service. He submits that the Cenvat credit is admissible on event management service and insurance auxiliary services as both the services are directly related to providing of output services, he concede that Cenvat credit is not admissible on rent a cab scheme operators service and excess credit availed on telecommunication internet and C.A. Service.
3.3 Regarding the departmental appeal, he submits that department filed appeal on the ground that refund is time bar for the reason that Commissioner(Appeals) considered the last date of quarter for computing one year, whereas period of one year should be calculated from the date of exports, he submits that though as per the export of service rule, export is complete on receipt of convertible foreign exchange but in case of refund under Rule 5 there is statutory provision that the refund should be filed on quarterly basis that means period start from the end of the quarter and not from the export of the services. He submits that Ld. Commissioner (Appeals) appreciated this legal position correctly and held that limitation of one year for filing the refund claim should be taken from end of the quarter therefore refund is not time bar.
4. Shri. Shyamlal Karoliya, Ld. Asstt. Commissioner(A.R.) appearing on behalf of the Revenue, as regard the assesees appeals are concern he reiterates the findings of the impugned order. He further submits that Ld. Commissioner(Appeals) has rightly denied the Cenvat credit in respect of Event management services and insurance auxiliary services as the same are not used in the providing output service. As regard the rent-a-cab service the same was excluded from the definition of input services therefore the same is also not admissible. As regard the Revenues appeal he submits that Ld. Commissioner (appeals) allowed the part refund holding that refund is not time bar. He submits that it is appellants admission that FIRC were received during the relevant quarter therefore export is completed as on date of FIRC. As per the Section 11B one year period is reckoned from the date of export therefore refund is time bar.
5. We have carefully considered the submissions made by both sides and perused the record.
6. From the overall case, issues to be decided by me arises as under:
(a) Regarding the refund under Rule 5 read with Notification No. 27/12-CE(N.T.)whether export turnover shall include the receipt of foreign convertible currency as per the FIRC during the particular quarter or as per the date of invoice.
(b) Whether the Cenvat credit is admissible in respect of event management service, insurance auxiliary service, rent a cab service, for providing exports services.
(c) In relation to refund under Rule 5 whether limitation of one year should be reckoned from the date of FIRC or from the end of particular quarter.
Regarding the export turnover relevant provisions of Rule 5 is reproduced below:
RULE [5. Refund of CENVAT Credit. (1) A manufacturer who clears a final product or an intermediate product for export without payment of duty under bond or letter of undertaking, or a service provider who provides an output service which is exported without payment of service tax, shall be allowed refund of CENVAT credit as determined by the following formula subject to procedure, safeguards, conditions and limitations, as may be specified by the Board by notification in the Official Gazette :
Refund amount = (Export turnover of goods + Export turnover of services) W Net CENVAT credit Total turnover Where, -
(A) ------
(B) -------
(C) ------
(D) Export turnover of services means the value of the export service calculated in the following manner, namely :-
Export turnover of services = payments received during the relevant period for export services + export services whose provision has been completed for which payment had been received in advance in any period prior to the relevant period - advances received for export services for which the provision of service has not been completed during the relevant period;
From the aforesaid provision in clause (D) of Rule 5(1) for export turnover of services, one of the element is payment received during the relevant period for export services. In the present case as per the FIRC the payment in convertible foreign currency was received during the relevant quarter therefore the same should be considered as export turnover during the relevant quarter only. There is no provision in the definition of turnover of services that the export turnover should be taken as per the date of invoice. Therefore the contention of the Ld. Commissioner(Appeals) is not sustainable and the refund has to be computed by taking date of FIRC during the particular quarter for the purpose of export turnover.
6.1 Regarding the admissibility of Cenvat credit of Event Management Services, Insurance Auxiliary Services which is group medical insurance for the employee and rent a cab service, I am of the view that in various judgments of this tribunal event management service and group medical insurance for the employee have been considered as input service therefore Cenvat credit is admissible on these services. The relevant judgments are as under:
Event Management Services
1. Dell International Services India (P.) Ltd. Vs. Commissioner Central Excise (Appeals), Bangalore 2010 (17) S.T.R. 540 (Tri. - Bang.)
2. Castrol India Limited Versus Commissioner Of Central Excise, Vapi [2013 (291) E.L.T. 469 (Tri. - Ahmd.)]
3. J.P. Morgan Services (i) pvt. Ltd. Versus Commissioner of S.T., Mumbai [2016 (42) S.T.R. 196 (Tri.-Mumbai) Group Medical Insurance Services
1. H.E.G. LTD. Versus COMMISSIONER OF C. EX., RAIPUR [2011 (21) S.T.R. 300 (Tri. - Del.)]
2. Millipore India Limited Vs CCE, Bangalore 2009 (13) S.T.R. 616 (Tri. - Bang.) Affirmed by Karnataka High Court in 2012 (26) S.T.R. 514 (Kar.)
3. CCE & ST, LTU, Bangalore Vs Micro Labs Ltd. . 2012 (26) S.T.R. 383 (Kar.)
4. CCE, Bangalore-III Vs Stanzen Toyotetsue India (P) Ltd. 2011 (23) S.T.R. 444 (Kar.) 6.2 However as regard the rent-a cab service and excess credit availed on Telecommunication/Internet Telecommunication Service and Chartered Accountants services, Ld. Counsel himself conceded that assessee are not entitle for the Cenvat credit therefore same is denied. Since Appeal No. ST/85447 for an amount 1,17,266/- is related to rent-a-cab service only, the said appeal is dismissed. As regard the Revenues appeal, I find that Ld. Commissioner (Appeals) allowed the refund holding that limitation as provided under Rule 11B in case of refund under Rule 5 shall be reckoned from end of the quarter. The departments stand is that the period should be considered from the date of FIRC. I find that export is completed as on date of FIRC but Rule 5 provides for filing of refund on quarterly basis i.e. only after completion of the quarter. In this situation refund can only be filed after last date of the quarter. If this is so, period of one year provided under Section 11B cannot start on any date before end of the quarter, it has to be reckoned from next date of quarter ends. In the present case, assessee has filed refund claim within one year from end of the quarter therefore it is within limitation. The Ld. Commissioner has rightly held that refund is not time bar. For this reason the departmental appeals are dismissed. In the result:
(a) Appeal No. ST/85446/15 is remanded to Original Adjudicating authority for fresh computation of refund in the light of my above observations in para 6.
(b) Appeal No. ST/85447/15 filed by the assessee and Appeal No. ST/85612 & 86211/15 filed by Revenue are dismissed. Since appeals itself have been disposed of, stay application filed by the Revenue become infructuous, hence dismissed as infructuous.
(Order pronounced in court on ______________ ) Ramesh Nair Member (Judicial) sk 10 ST/85446, 85447/15, ST/85612 & 86211/15