2018 (4) TMI 972 - AT - Service Tax

Tribunal sets quarter-end as refund date under CENVAT Credit Rules

Commissioner of CGST & Central Excise, Mumbai Central Commissionerate Versus M/s L'Oreal India Pvt. Ltd.

The Tribunal determined that the relevant date for refund claims under Rule 5 of the CENVAT Credit Rules should be the end of the quarter for which the ... Refund claim - relevant date - whether the relevant date is the date of invoice, date of Foreign Inward Remittance Certificate (FIRC) or the ends of the quarter for which the refund pertains? - Held that: - This issue has been considered by the Larger Bench of this Tribunal in the case of Commissioner of Central Excise & Service Tax, Bengaluru Vs. Span Infotech India Pvt. Ltd. [2018 (2) TMI 946 - CESTAT BANGALORE], where it was held that in respect of export of services, the relevant date for purposes of deciding the time limit for consideration of refund claims under Rule 5 of the CCR may be taken as the end of the quarter in which the ARC is received, in cases where the refund claims are filed on a quarterly basis. For the purpose of refund under Rule 5 of CENVAT Credit Rules, the relevant date should be taken from the end of the quarter for which the refund pertains. Appeal dismissed - decided against Revenue. Issues involved:Determining the relevant date for the purpose of refund under Rule 5 of CENVAT Credit Rules, 2004 and the notifications issued thereunder.Detailed Analysis:1. Interpretation of Relevant Date: The main issue in this case revolved around establishing the relevant date for refund claims under Rule 5 of the CENVAT Credit Rules, 2004. The Tribunal examined whether the relevant date should be the date of invoice, the date of Foreign Inward Remittance Certificate (FIRC), or the end of the quarter for which the refund pertains. The Tribunal referred to the Larger Bench's decision in the case of Commissioner of Central Excise & Service Tax, Bengaluru Vs. Span Infotech India Pvt. Ltd. to address this issue.2. Refund Conditions and Time Limits: The Tribunal analyzed the conditions, safeguards, and limitations for refund claims specified in Notification No. 5/2006 and Notification No. 27/2012. It noted that the time limit for filing refund claims is specified under Section 11B. While the relevant date for export of goods is clear, the issue arises concerning the export of services. The Tribunal discussed the ambiguity in the relevant date for export of services and the applicability of Section 11B in such cases.3. Judicial Precedents: The Tribunal considered various judicial precedents, including the decision of the Hon'ble Madras High Court in the case of GTN Engineering and the Hon'ble Karnataka High Court in the case of mPortal. It also referred to the decision of the Hon'ble Andhra Pradesh High Court in the case of Hyundai Motors regarding the relevance of the date of receipt of consideration in foreign exchange.4. Relevant Date Determination: After a detailed analysis of the provisions and judicial precedents, the Tribunal concluded that the relevant date for refund claims related to the export of services should be considered as the end of the quarter in which the Foreign Inward Remittance Certificate (FIRC) is received. This decision was based on a constructive interpretation of the provisions to facilitate the objective of granting refunds for unutilized CENVAT credit.5. Beneficial Amendment and Prospective Application: The Tribunal also considered the observations of the Hon'ble Supreme Court in the case of Vatika Township regarding the retrospective application of beneficial amendments and the prospective application of provisions imposing burdens or liabilities on the public. This consideration influenced the Tribunal's decision to determine the relevant date for export of services under Rule 5 of the CENVAT Credit Rules.6. Final Decision: Based on the above analysis and considerations, the Tribunal upheld that the relevant date for refund claims under Rule 5 of the CENVAT Credit Rules should be taken from the end of the quarter for which the refund pertains. Consequently, the Revenue's appeals were deemed unsustainable, and the impugned order on the issue was upheld and the applications were disposed of accordingly.