2017 (2) TMI 898

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....ey are registered with the Service Tax department under the category of 'Business Support Service and Business Auxiliary Service'. The appellant had availed various input services and paid Service Tax on output service. The appellant rendered the service to the parent company situated outside India and therefore is classifiable as 'Export of Service'. The appellant filed application for refund of unutilized Service Tax and Cess from time to time in terms of Rule 5 of the Cenvat Credit Rules, 2004, along with Notification No.5/2006-CE(NT) dated 14.03.2006. The Adjudicating Authority rejected the refund claims for contravention of Rule 3(2) (v) of Export of Service Rules, 2005 read with Rule 5 of Cenvat Credit Rules, 2004 and ....

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....nd it is the bank which has converted the same into Indian currency. 5. Attention of the Bench was also drawn to Regulation 3 of Foreign Exchange Management (Manner of Receipt and Payment) Regulation, 2000, which is reproduced below:- "3. Manner of Receipt in Foreign Exchange:- (1) Every receipt in foreign exchange by an authorized dealer, whether by way of remittance from a foreign country (other than Nepal and Bhutan) or byway of reimbursement from his branch or correspondent outside India against payment for export from India, or against any other payment, shall be as mentioned below: (2). all countries other than those mentioned in (1)   a) a) payment in rupees from the account of a bank situa....

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....pees on exported service through foreign Bank, who has issued FIRC (Foreign Inward Remittance Certificate). In the present case, the appellant produced the letter dated 04th October, 2013 of MIZUHO Corporate Bank Ltd., New Delhi Branch for clarification/confirmation regarding receipt of foreign exchange from Kobe Steel Ltd., Japan. It is stated in the said letter that FIRC is Foreign Inward Remittance Certificate and can be issued against inward remittance received from a foreign country in any foreign currency as well as in Indian Rupees if remittance is received in the manner specified by RBI under FEMA 14 Notification. I find that the Commissioner(Appeals) had examined the above letter in detail. For the purpose of proper appreciation of....

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....I under FEMA 14 notification. Now, with the clarification and RBI Notification I find that it is allowed to receive the amount of value of services in Indian rupee and it is inward remittance under FEMA 14. Thus, I find that the receipt of value of export is permitted in Indian rupees but the provision of Export of Services Rules, 2005 has clearly stipulated that Payment of such service received by service provider in Convertible Foreign Exchange. I find that statute of Export of Service Rules, 2005 has not permitted such receipt in Indian rupees to be treated as receipt of payment in convertible foreign currency. Since there is no clear guideline on this issue, I find that the refund is not permitted in the circumstance of these appeals. I....