Quarterly refund computation under CENVAT Rules turns on foreign currency receipt, with limitation running from quarter-end.
For refund under Rule 5 read with Notification No. 27/12-CE(N.T.), export turnover of services is to be computed on the basis of foreign convertible currency actually received during the relevant quarter, not by invoice date. CENVAT credit was admissible for event management service and insurance auxiliary service used for export of services, but not for rent-a-cab service or the excess credit claimed on telecommunication/internet telecommunication service and chartered accountant service. The one-year limitation under Section 11B was held to run from the end of the relevant quarter, because the refund claim arises only after quarter-end. The refund was to be recomputed on the correct quarterly basis.
Issues: (i) Whether, for refund under Rule 5 read with Notification No. 27/12-CE(N.T.) dated 18.06.2012, export turnover of services is to be computed on the basis of receipt of foreign convertible currency during the relevant quarter or on the basis of the date of invoice; (ii) whether CENVAT credit was admissible in respect of event management service, insurance auxiliary service, rent-a-cab service, telecommunication/internet telecommunication service, and chartered accountant service used for export of services; (iii) whether the limitation of one year for filing refund under Section 11B is to be reckoned from the date of FIRC or from the end of the relevant quarter.
Issue (i): Whether, for refund under Rule 5 read with Notification No. 27/12-CE(N.T.) dated 18.06.2012, export turnover of services is to be computed on the basis of receipt of foreign convertible currency during the relevant quarter or on the basis of the date of invoice.
Analysis: The formula in Rule 5 defines export turnover of services with reference to payments received during the relevant period for export services. The receipt of foreign currency through FIRC during the relevant quarter answers the statutory test. No provision in the rule requires export turnover to be taken according to the invoice date.
Conclusion: Export turnover of services has to be computed on the basis of receipt of foreign convertible currency during the relevant quarter, not on the basis of the date of invoice.
Issue (ii): Whether CENVAT credit was admissible in respect of event management service, insurance auxiliary service, rent-a-cab service, telecommunication/internet telecommunication service, and chartered accountant service used for export of services.
Analysis: Event management service and group medical insurance for employees were treated as input services in the cited tribunal and high court decisions. By contrast, rent-a-cab service was excluded from the scope of input service, and the assessee also conceded that excess credit on telecommunication/internet telecommunication service and chartered accountant service was not admissible.
Conclusion: CENVAT credit was admissible for event management service and insurance auxiliary service, but was not admissible for rent-a-cab service or excess credit on telecommunication/internet telecommunication service and chartered accountant service.
Issue (iii): Whether the limitation of one year for filing refund under Section 11B is to be reckoned from the date of FIRC or from the end of the relevant quarter.
Analysis: Since refund under Rule 5 is filed on a quarterly basis, the claim can arise only after completion of the quarter. The one-year period under Section 11B therefore cannot begin before the quarter ends and must be counted from the next date after the quarter-end.
Conclusion: Limitation under Section 11B is to be reckoned from the end of the relevant quarter, not from the date of FIRC.
Final Conclusion: The refund claim was directed to be recomputed on the correct quarterly basis, the appeal relating to inadmissible rent-a-cab credit was rejected, and the revenue's challenge to limitation failed.
Ratio Decidendi: For refund under Rule 5 of the CENVAT Credit Rules, 2004, export turnover of services is determined by receipts during the relevant quarter, and where refund is statutorily claimable only after quarter-end, the limitation under Section 11B of the Central Excise Act, 1944 runs from the quarter's end.