Limitation for service export refunds runs from quarter-end of foreign exchange realisation, with bank evidence requiring fresh verification.

For refund claims under Rule 5 of the Cenvat Credit Rules, 2004 relating to export of services, the relevant date for the one-year limitation period is the end of the quarter in which foreign exchange is realised, applying Section 11B and the Larger Bench view in Span Infotech. The earlier limitation objection could not be sustained without reconsideration on that basis. On proof of receipt of consideration in convertible foreign exchange, additional bank certificates and confirmation documents required verification, and the rejection for want of remittance evidence could not stand without examining that material. The matter was remanded for fresh adjudication on limitation and export-realisation evidence.

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Issues: (i) Whether the refund claims under Rule 5 of the Cenvat Credit Rules, 2004 were barred by limitation and, if not, what is the relevant date for reckoning the period of one year; (ii) Whether the appellant had established receipt of consideration in convertible foreign exchange so as to sustain the export of services and refund claim.

Issue (i): Whether the refund claims under Rule 5 of the Cenvat Credit Rules, 2004 were barred by limitation and, if not, what is the relevant date for reckoning the period of one year.

Analysis: The refund was examined in the light of Section 11B of the Central Excise Act, 1944 as made applicable to service tax refunds and the Larger Bench view in Span Infotech. The relevant date for export of service refund claims filed on a quarterly basis was treated as the end of the quarter in which the foreign exchange is realized. The earlier view cited against the appellant could not be sustained in the face of that Larger Bench ruling.

Conclusion: The limitation objection required reconsideration on the basis of the Larger Bench rule, and the rejection on that ground could not be upheld without fresh examination.

Issue (ii): Whether the appellant had established receipt of consideration in convertible foreign exchange so as to sustain the export of services and refund claim.

Analysis: The refund had been rejected for want of Foreign Inward Remittance Certificates, bank realization proof, invoices and correlation of bank entries, and for the circumstance that the amounts were credited in Indian rupees. However, additional bank certificates and confirmation documents were produced showing the nature of remittance and credit, and later refund sanctions for the same kind of transactions were also noticed. Those materials had not been considered by the lower authorities and required verification.

Conclusion: The finding on receipt of convertible foreign exchange was set aside for fresh scrutiny in de novo proceedings.

Final Conclusion: The matter was sent back for fresh adjudication after considering limitation, the evidence of foreign exchange realization and the subsequent treatment of similar transactions, with an opportunity of hearing to the appellant.

Ratio Decidendi: In refund claims under Rule 5 of the Cenvat Credit Rules, 2004 relating to export of services, the relevant date for limitation is the end of the quarter in which foreign exchange is realized, and additional credible bank evidence bearing on export realization must be examined before rejecting the claim.

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